France introduces a new digital tax for technology giants effective December this year, which could lead to US tariffs on French goods.
“Companies subject to this tax have been notified,” said a spokesman for the French Ministry of Finance, referring in particular to the US companies Google, Amazon, Facebook and Apple, known in France as GAFA, according to AFP.
The new levy will see the giants taxed 3% on what they earn from online sales, digital advertising and the sale of private data.
Although flagged as a tech tax mostly hitting US companies, the new rule technically applies to any business with annual revenues above US $900 million, with earnings of over US $30 million from France.
The French government estimates it will rake in $470 million to US $500 million this year.
US government sees the new tax as unfair and punitive and threatened with retaliation forcing France early this year to a temporary truce with Trump to avoid a tariff war.