French Senate approves tax as USA opens digital levy probe

The probe could pave the way for the imposition of tariffs- something Mr Trump has done repeatedly since taking office

The lawmakers included a suggestion to use a section of the tax code that would double the rate of US taxes on French citizens and companies in the U.S.

The Trump administration said Wednesday that it would investigate whether France's planned tax on technology companies amounts to unfair trade practices by discriminating against United States companies. The probe was launched under Section 301 of the US Trade Act of 1974.

"Digital services taxes are an ill-disguised effort to target companies that are thought to be too powerful, too profitable, and too American", Atkinson said.

The French parliament has just approved a 3% digital sales tax aimed at closing the loopholes big tech companies use to bring down their tax bills.

He said in a statement that "the President has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce".

The document was nodded on Thursday by a simple show of hands in France's Senate upper house after being passed by the National Assembly lower chamber.

French Economy and Finance Minister Bruno Le Maire delivers a speech during a high-level forum on debt at the Finance ministry in Paris, France, May 7, 2019.

But French economy minister Bruno Le Maire France rejected the USA reaction on Thursday, saying "threats" were not the way to resolve such disputes.


"France is a sovereign country, its decisions on tax matters are sovereign and will continue to be sovereign", he added.

The French government is to impose a tax of up to 18 euros ($20) on plane tickets for all flights from airports in France to fund less-polluting transportation projects, a minister said Tuesday.

Facebook and Apple declined to comment.

The tax would affect companies with at least 750 million euros ($844m) in annual revenues and apply to revenue from digital business including online advertising.

Le Maire said he was warned about the so-called section 301 investigation during a "long conversation" with US treasury secretary Steven Mnuchin on Wednesday, saying it was the first time such a step had been taken in the history of French-US relations.

Trump has also imposed new tariffs on imports of European Union steel and aluminum - and has threatened punitive duties on cars and auto parts if the two sides fail to reach an overall trade deal.

The move opens a new trade dispute with a European ally and comes as theFrench Senate prepares for a final vote on the tax on Thursday.

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