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28 January 2020

Digital tax

On 23 January 2020, in Davos, Bruno Le Maire, Minister of Economy and Finance, and his American counterpart, Steven Mnuchin, reached an agreement on a common global framework between France and the United States on digital tax.
 
During the meeting of 19 January, the President of the Republic and Donald Trump agreed to avoid tariff escalation and to continue efforts to reach an international agreement under the OECD on taxing digital companies by the end of 2020. By avoiding tariff escalation, the aim is to protect French companies, and particularly those in the agricultural sector.

Following this meeting, discussions continued, and an agreement was reached by the Minister of Economy and Finance, Bruno Le Maire, and his American counterpart, Steven Mnuchin, on a common global framework between France and the United States on digital tax. This common global framework includes three commitments made by France and the United States.

France is prepared to postpone the payment of advance payments for our national digital tax to December 2020 (one single advance payment in December instead of two during the year as was the case in 2019) while waiting for an international solution to be implemented.
  • However, neither the withdrawal nor the suspension of the French tax on digital companies will be accepted. France has merely accepted to postpone the payment of instalments while awaiting an international solution to replace the national tax.
  • Digital companies will pay their fair share of taxes in 2020. Either under an international scheme, and this is France’s desire, or under the national scheme should an international solution not be found.
For its part, the United States is ready to abandon sanctions during this period during which France will postpone the advance payments for its national tax.

France wishes to use this time to progress towards an international solution under the OECD based on the two pillars of minimum tax (global minimum tax on companies) and digital tax (on digital companies).

France is continuing in its aim to achieve fair taxation of digital companies. It wishes to find an international agreement under the OECD, which is still the best solution. We will not compromise on these principles.