By Laurel Wamsley, July 11, 2019
rench lawmakers have approved a tax on digital companies that will affect U.S. tech behemoths known in France as "Les GAFA" — Google, Amazon, Facebook and Apple.
The U.S. government is already threatening to retaliate: On Wednesday, President Trump ordered a probe of the French tax. It's a sign that another trade war like the one between the U.S. and China could be stirring – except that it's with one of America's allies, and in this case, it's U.S. companies that are seen as the tax dodges.
The measure was approved by France's Senate on Thursday. It will levy a 3% tax on revenue from digital services earned in France by companies that make more than 25 million euros ($28 million) in French revenue and 750 million euros ($844 million) in global revenue. It will be applied retroactively from January 2019.
French officials have been frustrated that digital companies have been able to avoid taxes by establishing their European headquarters in countries such as Ireland and the Netherlands, which offer corporations low tax rates. France says it will roll back its tax if an EU levy takes effect. Read more.