France introduces Amazon tax despite Trump threats, UK to follow

The French government has introduced a tax aimed at large online companies like Amazon. The United Kingdom is looking to follow suit, despite Trump’s reprisal threats.

France: 400 million euros

France has adopted a new law, introducing a tax on companies that earn over 750 million euros in digital revenue, of which over 25 million must be earned in France. Such companies will have to pay a tax of 3 %, earning the French treasury an estimated 400 million euros this year alone.

The United States have threatened with reprisals before, as it believes the law would be mostly aimed at American companies (as suggested by the nickname ‘GAFA tax’, meaning Google, Apple, Facebook and Amazon). American trade representative Robert Lighthizer has today repeated those threats in a veil, saying “The United States is very concerned that the digital services tax which is expected to pass the French Senate tomorrow unfairly targets American companies.” Lighthizer continued: “The President has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce.”

UK: 500 million pounds

Despite this American response, the United Kingdom too is putting wheels in motion to get a similar tax – with slightly different numbers – ready. The British law targets companies with a total online turnover of over 500 million pounds (550 million euros), of which at least 25 million pounds (28 million euros) on the British market. In this case, a tax of 2 % would earn the British treasury 400 million pounds (450 million euros) anually.

British finance Minister Philip Hammond had announced such a tax already last year, but is now determined to go on with it, as an international agreement on the matter seems to be unlikely to get a short time resolution.