A notice released by the Office of the U.S. Trade Representative (USTR) in advance of publication in the Federal Register addresses findings of the Section 301 investigation of France’s digital services tax and announces the imposition of additional customs duties of 25% on U.S. $1.3 billion of French products imported into the United States.
According to the USTR notice, the additional customs duties are suspended for 180 days, until January 6, 2021.
Read the USTR notice [PDF 557 KB] that lists French products subject to the additional customs duties, in an annex. The USTR notice was published in the Federal Register on July 16, 2020.
In July 2019, the French digital services tax legislation was enacted. The digital services tax was 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.
Also in July 2019, the USTR initiated an investigation of France’s digital services tax and then in December 2019 announced findings 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. Read TaxNewsFlash
In early 2020, French officials announced that the digital services tax is still to be imposed for 2020, but that collection of the tax is deferred (in particular, both installment payments due in April and October 2020 being suspended).
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor 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 on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.