France to impose digital tax on big tech cos like Google, Facebook, Apple despite US retaliation threat

New Delhi: France has said that it will impose new "digital tax" on online technology giants for their 2020 earnings, despite a retaliatory threat from US, impacting US firms Google, Amazon, Facebook and Apple. 

Washington, it has been learnt, has warned that it could retaliate with new tariffs on French imports. An AFP report quoting a French ministry official has said that the "companies subject to this tax have been notified. 

Ealier, in May, nearly 140 countries from the Organisation for Economic Cooperation and Development (OECD) were negotiating the first major rewriting of tax rules in more than a generation, to take better account of the rise of big tech companies such as Amazon, Facebook, Apple and Google that often book profit in low-tax countries.

Paris offered in January to suspend its digital tax on tech companies’ income in France until the end of the year while any international deal was negotiated. However, the fallout from the coronavirus outbreak has left finance ministries most focused on saving their economies, potentially jeopardising the end of the year deadline.

France’s national tax has been a source of contention with Washington, which considers that it unfairly targets U.S. digital companies.

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Past attempts to create an EU-wide digital tax have failed in the face of opposition from Ireland, where many big U.S. tech companies book profits, and some Nordic countries.

With Reuters Inputs