GAFA tax becomes law, US launches investigation

France became the first major economy to impose a tax on internet heavyweights, as on 11 July the parliament definitively adopted the GAFA law, an acronym for Google, Apple, Facebook and Amazon. The 3% tax on the French revenue of large internet companies could yield €500m a year. The tax would target some 30 companies, mostly American but also Chinese, German, Spanish and British, as well as one French firm and several firms with French origins that have been bought by foreign companies.

US President Donald Trump on Wednesday ordered an investigation into France's tax on technology companies, that could lead to the US imposing tariffs as part of a new trade tiff with the EU. “The US is very concerned that the digital services tax … unfairly targets American companies,” US Trade Representative Robert Lighthizer said in a statement announcing Trump's order. It gives Lighthizer up to a year to investigate if France's digital-tax plan would hurt US companies. France criticised the US move, saying it could trigger punitive tariffs and adding that “threats” were not the way to resolve disputes. “Between allies, I believe we can and must resolve our differences in another way than through threats,” Economy Minister Bruno Le Maire (pictured) told the French Senate ahead of the vote on the tax.

Similar articles

  • Facebook's Libra abandoned by major payment companies

    Facebook's Libra abandoned by major payment companies

    Facebook’s efforts to establish a global digital currency called Libra suffered severe setbacks on Friday, as major payment companies including Mastercard and Visa Inc quit the group behind the project, news wires reported. The two companies announced they would leave the association, as did EBay, Stripe and Latin American payments company Mercado Pago.

    25
  • Global regulators to question Libra, as EU concerns rise

    Global regulators to question Libra, as EU concerns rise

    Global regulators will question Facebook on Monday about its Libra cryptocurrency, amid concerns from European Union governments over the threat the digital currency poses to financial stability, news wires reported, citing the Financial Times. Officials from 26 central banks, including the US Federal Reserve and the Bank of England, will meet with representatives of Libra in Basel on Monday. Libra’s founders have also been invited to answer key questions about the currency’s scope and design, FT said.

    31