The U.S. Senate Finance Committee today issued a release reporting that Chairman Chuck Grassley (R-IA) and ranking member Ron Wyden (D-OR) have sent a letter to the U.S. Treasury Secretary expressing concerns about the French government’s proposal to implement a digital services tax.
According to the Finance Committee release, the senators requested that Treasury use measures available under U.S. law—including application of section 891—to “convince the French government to rethink its decision to implement a digital services tax that would unfairly target some U.S.-based companies.”
The Finance Committee leaders further wrote:
We write to encourage you to intensify your efforts to convince the French government that it would be unwise and short-sighted to implement a digital services tax (DST) while France, the United States, and other countries are expeditiously working to reach a consensus at the Organisation for Economic Co-operation and Development (OECD) on the tax challenges arising from the digitalization of the economy.
It is our understanding that notwithstanding the progress being made at the OECD, the French General Assembly and Senate have both passed versions of a DST that could hinder such progress and create a new transatlantic trade barrier. The DST would unfairly target certain U.S.-based multinational companies, apply retroactively to the beginning of this year, and potentially lead to significant double taxation. Time is, therefore, of the essence.
Read more about the French government’s proposal for a digital services tax in TaxNewsFlash.
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