France unveils pioneering tax against Technological companies, and Trump is about to retaliate

By | July 29, 2019

Many countries had a problem with the technological companies that have only a virtual existence, but earn a massive revenue while being operated from another country via internet. Many financial scholars have seen this as a form of tax evasion. France has finally unveiled a pioneering plan to tax technological companies that have no physical presence in France but earn massive revenues from online services. Major American technological giants are expected to be paying billions of dollars to France as a result, and the President of the United States is vowing to retaliate.
Senate of France passed the controversial bill earlier this month, and it was signed into law by President Emmanuel Macron this week. The new law will charge a 3% tax on technology firms that earn more than $834 million in global revenue and €25 million in France per year, and would target the revenue that those companies earn inside France. Nearly 30 companies around the world seems to meet the taxation criteria, and while they all not all from the United States, a large majority is.
President Trump is not letting this action go unanswered, especially since many other countries could follow suit, and create a massive disadvantage for big, American technology companies against the world’s upcoming firms. Trump tweeted immediately that the White House will “announce a substantial reciprocal action,” and while he didn’t specify, the Tweet’s language definitely suggests that he fixed his eye on a tax against French wine. United States is by far the largest market for French wine, and if Trump follows through with his threat, it is sure to diminish its competitiveness in USA.
The Office of the United States Trade Representative also announced that they have opened an investigation into the digital tax to determine whether it constitutes an unfair trade action or a case of double taxation.

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