The French parliament has voted to double the tax on big tech companies, risking a reaction from Donald Trump, who has long threatened to retaliate with trade tariffs, Bloomberg notes.
France’s lower house late Tuesday approved an amendment to the 2026 budget bill that could raise the tax on digital revenues of companies such as Amazon, Alphabet (owner of Google) and Meta Platforms (owner of Facebook) from 3% to 6%.
The change is milder than another proposal to raise the rate to 15%, but would mark a significant tax increase.
US Republicans have already warned that an increase to 15% would be an “unwarranted attack” on US tech companies and would leave “Congress and the Trump administration little choice but to retaliate aggressively”.
The amendment is part of a budget bill that will likely be passed next month or in December and is not certain to become law. The French government does not have a majority in parliament and has said it will not use constitutional means to circumvent the votes.
The French government is wary of the move and has said it will continue to work with parliament, even though the proposed 6% amendment came from MPs in President Emmanuel Macron’s party.
“I take into account Parliament’s desire to strengthen the taxation of digital giants,” said Finance Minister Roland Lescourt. “This is an issue that needs to be approached with care, especially in terms of raising the limits, and on which we need to make progress at European level and through international dialogue.”
The French government is under pressure to reduce the biggest deficit in the eurozone. In addition, opposition parties are threatening to oust Prime Minister Sebastien Lecorny in the coming weeks if there are no major tax increases on big business and the wealthiest individuals.
On Monday, the government sought to appease MPs and boost revenue with a revision to increase its original plans for corporation tax rates.
Another amendment proposed by the far-left opposition and approved late Tuesday would create a universal tax for multinational companies based on their activity in France. Lescourt said the measure would be “unenforceable” as it likely violates 125 bilateral tax treaties to which France is bound.
France was among the first countries to implement the digital services tax (DST) in 2019, which is hitting the revenues of global tech companies. At the time, Trump said the tax introduced unjustified discrimination against American companies and threatened to retaliate by imposing tariffs on iconic French products such as cheese, sparkling wine and handbags.
Eventually, the two sides negotiated a plan under which France would withdraw DST once new global rules for taxing multinational digital services companies take effect. However, negotiations on these rules were never concluded.
Lawmakers who proposed doubling the rate from 3 percent to 6 percent said the roughly 700 million euros ($814 million) France earns annually from the tax is still “disproportionate” to the profits made in France by big tech companies.
The amendment also changes the threshold for companies subject to the tax to €2 billion in global revenue from €750 million previously.
Source :Skai
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