Paris and Washington have two weeks to settle a disputed French tax proposal on multinational tech giants, the French finance minister said Tuesday after a "long discussion" with his US counterpart.
"We have given ourselves exactly 15 days" to solve the issue, Bruno Le Maire said, while urging Washington not to impose sanctions during this time. The deadline coincides with a scheduled meeting on the topic at the World Economic Forum meeting in Davos from January 21 to 24, he said.
"In this period of discussion, France should not be hit by American sanctions," Le Maire said a day after he spoke to US Treasury Secretary Steven Mnuchin by telephone. President Donald Trump last month threatened to punish Paris for a new tax on tech giants such as Netflix and Amazon, unveiling sky-high retaliatory duties on $2.4 billion of French wines, makeup and leather handbags.
"If there were to be American sanctions... we would bring the case to the WTO (World Trade Organization) and we will be ready to respond," Le Maire said Tuesday. "We believe that the project of American sanctions against French digital taxation is at once unfriendly, inappropriate and illegitimate," he added.
Le Maire was speaking at a meeting in Paris with EU Trade Commissioner Phil Hogan, who expressed the bloc's support for France. "We will look at all possibilities. If any tariffs or measures are imposed by the United States, the European Commission will stand together with France and all other member states who wish to have the sovereign right to impose digital taxation on companies in a fair way," said Hogan.
He is to travel to Washington next week and meet US Trade Representative Robert Lighthizer. Lighthizer, who had invited written comments on the matter, is to hold a public gathering Tuesday to consider requests for tax exemptions.
France last year approved a levy on tech firms as international efforts dragged on to find a new model for taxing revenues earned via online sales and advertising. Tech companies often pay little tax in countries in which they are not physically present. The levy will see them paying up to three percent of revenues earned in France.
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