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France sending tax payment notices to tech firms

France sending tax payment notices to tech firms
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France’s finance ministry has sent out notices to tech companies asking that they pay a new digital service tax next month, Reuters reports

France applied a 3 percent tax on revenue from digital services earned in France by companies with revenues of more than 25 million euros there and more than 750 million euros worldwide.

American tech companies, whom the tax would mainly apply to, opposed it, and nations have been negotiating, so far unsuccessfully, for a solution.

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France is asking the companies to pay the tax in December, something it had said it would do.

“Companies subject to the tax have received their notice to pay the 2020 installment,” a ministry official said according to Reuters.

Facebook told the news outlet that it has received notice, and said it will “ensure compliance with all tax laws in the jurisdictions where we operate.” A person at Amazon familiar with the matter told Reuters that the online retail giant has been notified and intends to comply. 

France plans to withdraw the tax as soon as the Organization of Economic Cooperation and Development (OECD) reaches a deal to update the rules on cross-border taxation in the internet age, Reuters notes. Officials have said talks stalled as the U.S. became hesitant to sign onto a multilateral agreement. 

The Office of U.S. Trade Representative determined in December that the tax discriminates against U.S. companies, and proposed tariffs of up to 100 percent on $2.4 billion of French products in response.

The following month, the U.S. and France reached an agreement under which France paused the tax and the U.S. held off on imposing tariffs while negotiations with the OECD were ongoing. 

The U.S. later announced plans to impose 25 percent tariffs on about $1.3 billion worth of French products, which are set to take effect on Jan. 6.