There are widely circulated press reports that U.S. President Trump and French President Macron have agreed to resolve issues concerning the French digital services tax.
In France, the digital services tax was enacted in July 2019, and imposes a 3% tax on annual revenues generated by certain companies providing covered digital services to, or aimed at, French users. There are thresholds for the tax to apply—it only applies for companies with annual revenues from the covered digital services of at least €750 million globally and €25 million in France. Read TaxNewsFlash
The U.S. Trade Representative in early July 2019 initiated an investigation of France’s digital services tax under Section 301 of the Trade Act of 1974, and in August 2019, the USTR held a public hearing concerning the tax. Read TaxNewsFlash
While both President Trump and President Macron referenced the agreement in a press conference, the details of the arrangement are not yet clear. There is not yet an official announcement from the U.S. Treasury Department or the USTR about this alleged agreement.
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