France will maintain its planned tax on digital services at the Organization for Economic Cooperation and Development (OECD) level despite Washington's threat of punitive tariffs, Minister of Economy and Finance Bruno Le Maire said on Wednesday.
"We will give no ground on digital tax. I call on all G7 (Group of Seven) states to step up work at the OECD to reach an international solution by the end of 2020," said Le Maire during a G7 finance ministers' conference call.
"There is a real contradiction between the United States' call for unity within G7, which we support, and the perspective of new trade sanctions," he said.
U.S. Trade Representative Robert Lighthizer announced on Tuesday a "Section 301" investigation into digital services taxes that have been adopted or are considered by the U.S.'s ten trading partners (Austria, Brazil, the Czech Republic, the European Union, India, Indonesia, Italy, Spain, Turkey and the United Kingdom).
"Section 301," under an outdated U.S. trade law adopted in 1974, allows the U.S. president to unilaterally impose tariffs or other trade restrictions on foreign countries.
Last July, the French parliament adopted a digital tax bill, paving the way for the eurozone's second-largest power to unilaterally tax internet giants by three percent on much of their digital sales in France.
Washington has completed a "Section 301" probe into France's digital tax regime and threatened to impose tariffs of up to 100 percent on 2.4 billion U.S. dollars worth of French goods in retaliation for the tax that it deemed discriminatory.
It agreed to delay the imposition of tariffs on France as a multilateral deal on international taxation was under negotiation at the OECD.
