According to France's finance ministry, the country will impose a new digital tax on tech giants for revenue by 2020 even though Washington warns that the country could respond with new tariffs on French imports.
In this regard, several US technology firms such as Google, Amazon, Facebook and Apple, have already been notified of the tax. However, the US claims that the tax collection is unfair.
In addition, the move taken by France risks increasing long-term tensions between the two countries as American tech multinational companies have to pay higher taxes than their taxes in other countries.
Under EU law, American companies can reap the benefits of a single member country like most low tax jurisdictions such as Ireland or the Netherlands.
As a result of the pressures faced, France has imposed a digital tax in 2019, as much as 3% of the profits earned from online sales for third-party retailers, as well as digital advertising and the sale of personal data.
But Paris has reached an agreement with President Donald Trump's administration to postpone the tax while seeking a global digital tax agreement under the auspices of the Organization for Economic Co-operation and Development (OECD).
Unfortunately, Trump has warned that they will impose a 25% tax on French products worth $ 1.3 billion including cosmetics and well-known handbags in the country.
In October, the OECD revealed that they would not reach an agreement on new global standards for taxing digital firms this year as expected, largely due to US opposition to the proposal.
