France faces USA backlash on 3% digital services tax

French digital service tax target US companies unfairly says administration

But French lawmakers on Thursday proceeded to establish a 3 percent tax on among others, Amazon and Facebook, on grounds that companies must be taxed where they operate.

With Britain and a number of other European countries planning to follow France's lead by imposing similar levies, the pressure is mounting on the giants of California's Silicon Valley.

She said that, in light of growing concerns about carbon emissions from trains, "France is committed to the taxation of air transport but there is an urgency here".

About 30 companies will pay the new tax, most of which are United States tech giants such as Alphabet, Apple, Facebook, Amazon and Microsoft.

The French tax, approved by the country's Senate yesterday, will apply a 3% tax on technology companies with revenue of more than €750m ($850m) of which at least €25m is generated in France.

France pushed ahead with the tax after European Union countries failed to agree a levy valid across the bloc in the face of opposition from Ireland, Denmark, Sweden and Finland.

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Some experts fear France's unilateral approach with the digital tax will backfire, ultimately harming consumers and smaller businesses it aims to protect.

Nevertheless, those most likely to be hit by the measure are largely American giants, and the Trump administration in Washington is determined to defend its online operators. The levy will apply to companies with more than 500 million pounds ($626 million) in revenue, if more than 25 million pounds comes from British users. In the first quarter of this year, for instance, Amazon's share of French e-commerce went down slightly, but the American retail behemoth still controlled no less than half of France's online trade. In a joint statement, Republican Chuck Grassley of Iowa, committee chairman, and Democrat Ron Wyden of OR said: "The digital services tax that France and other European countries are pursuing is clearly protectionist and unfairly targets American companies in a way that will cost U.S.jobs and harm American workers".

"We have chose to put in place an eco-tax on all flights from France", Ms Borne said during a news conference on Tuesday.

France argues the digital tax is a temporary measure until a broader agreement among countries is reached.

Many global tech companies pay taxes in the countries where their headquarters are based, rather than where they generate sales.

'The UK has always sought to lead in finding an worldwide solution to taxing the digital economy, ' claims Financial Secretary to the Treasury and Paymaster General Jesse Norman.

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