Thursday 19 September 2019

Tech firms tell US French tax will hit customers

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Donal O'Donovan

Donal O'Donovan

US tech firms including some of Ireland's biggest employers have called on France to scrap its planned digital tax, saying it is unfair, will cost millions to administer and will be passed on to consumers.

At a US government hearing in Washington DC yesterday senior executives from Google, Facebook and Amazon, along with lobbyists for other Silicon Valley tech firms, told US officials that the French levy set a dangerous precedent but asked the US government not to retaliate with its own tariffs.

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In July, the French Senate approved a 3pc levy that will apply to revenue from digital services earned in France by companies with more than €25m in French revenue and €750m worldwide sales.

The US Trade Representative's (USTR) office opened a probe into the new tax, which it called "unreasonable."

Amazon's international tax policy director Peter Hiltz said in written testimony for the USTR hearing that more than 10,000 small- and medium-size French enterprises (SMEs) sell through Amazon's online stores and notified them that certain fees will increase by 3pc for sales made on Amazon in France from October 1st.

He added that "US products and services sold through Amazon's online store in France will cost more as a result" of the tax.

Facebook global tax policy head Alan Lee's testimony said the tax "poses difficulties for Facebook's business model and will hinder growth and innovation in the digital economy" and claimed it would require a re-engineering of its systems.

He added that "while we may have the necessary data to calculate the tax, it would require additional time and resources to capture this data and maintain it for these new tax and audit purposes."

Google trade policy counsel Nicholas Bramble said in written testimony that the tax is "a sharp departure from long-established tax rules and uniquely targets a subset of businesses" and is "likely to generate disputes on whether specific digital activities were 'supplied in France' or in another region."

Additional reporting Reuters

Irish Independent

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