The President of France has tweeted that he had a “great discussion” with President of the United States, Donald J Trump over a digital tax that France had been planning. The Emmanuel Macron went on to state that “we will work together on a good agreement to avoid tariff escalation.”
The dispute began last year when the French government approved a levy on up to three per cent of revenues earned earned via online sales and advertising targeting the tech giants, but also including firms with revenues of more than $28 million in France and >$830 million globally.
In response, the Trump administration has threatened to impose taxes on notable French products. Among the French products targeted with duties of as much as 100% were luxury items like cheese and wine.
Public perception within France is weighted towards taxation of foreign tech companies, as they often pay little tax in the country. This is therefore a popular tax for an otherwise unpopular government there.
During the discussion, the two President’s agreed to hold off on a potential tariffs war until the end of 2020 and continue negotiations at the Organisation for Economic Cooperation and Development (OECD) on the digital tax during that period.
For there part, the French have said any international agreement on digital taxation reached within the OECD would supersede the French tax.
The White House said yesterday that both Trump and Macron agreed agreed over the importance of completing negotiations on the digital services tax.