France has pushed ahead with a new digital tax for technology giants effective from December this year, risking a tariff war with the United States.
“Companies subject to this tax have been notified,” a spokesman for the country’s Ministry of Finance was quoted as saying with a particular reference to Google, Amazon, Facebook and Apple, known in France as GAFA.
The new levy will see the giants taxed 3% on what they earn from online sales, digital advertising and the sale of private data.
Although touted as a tech tax mostly hitting US companies, the new rule technically applies to any business with annual revenues above US $900 million (AUD 1.2 billion), with earnings of over US $30 million (AUD $40 million) from France.
The French government estimates it will rake in US $470 million to US $500 million this year.
US government sees the new tax as unfair and punitive and early this year threatened with retaliation forcing France to a temporary truce with Trump to avoid a tariff war.