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France: Update on digital services tax

France: Update on digital services tax

There are reports indicating that France will delay collection of the digital services tax payments due in April and October 2020.

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Information indicates that the tax will still be imposed for 2020, but that collection of the tax will be deferred (in particular, both installment payments due in April and October 2020 would be suspended). There is no official release from the French government.

Read a July 2019 report that describes in detail France’s digital services tax: TaxNewsFlash

In brief, the situation concerning France's digital services tax is as follows:

  • The French digital services tax legislation imposes a 3% tax on annual revenues generated by certain companies that provide certain digital services to, or aimed at, French users. The tax applies only to companies with annual revenues from the covered services of at least € 750 million globally and € 25 million in France. According to the U.S. Trade Representative (USTR), the services covered are ones where U.S. firms are global leaders. 
  • The USTR initiated an investigation of France’s digital services tax in July 2019.
  • The USTR in December 2019 determined that France’s digital services tax was “unreasonable or discriminatory and burdens or restricts U.S. commerce.” The USTR proposed action in the form of additional duties of up to 100% on certain products of France.

 

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