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Multinational Entities — Get Ready for New French Digital Tax

Multinational Entities — New French Digital Tax

The U.S. is set to challenge the new tax, saying it unfairly targets US technology companies

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Large multinational entities that provide certain digital services to French users may be affected by France's new 3% tax on digital services. The new tax would apply to specified digital revenues generated in France and is included in legislation passed by the French parliament on July 11, 2019.The legislation is expected to be enacted shortly by the French president, but can be delayed if the constitutional court is asked to review the legislation.

The new tax is expected to apply to approximately 30 multinational taxpayer groups. It would only apply to companies with total annual revenues of more than €750 million globally and more than €25 million in France, as generated through specified digital services.

Unfair trade practice? U.S. Investigation

The U.S. says it has initiated an investigation into whether France's new tax is effectively an unfair trade practice. The country feels that the tax unfairly targets certain U.S.-based technology companies.

To read more about France's new digital tax (and the U.S. response), see the following KPMG U.S. TaxNewsFlash editions:

For more information, contact your KPMG adviser.

Information is current to July 16, 2019. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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