Washington, D.C. – Today, Congressman Darin LaHood (R-IL) and Congresswoman Suzan DelBene (D-WA), co-chairs of the Digital Trade Caucus, sent a letter to Treasury Secretary Steven Mnuchin and Trade Ambassador Robert Lighthizer, urging them to take action in response to France’s proposal to impose discriminatory taxes on digital services.
“The French tax on digital services will disproportionately affect U.S. technology exporters by setting a threshold that effectively carves out all French competitors,” wrote LaHood and DelBene. They added, “We encourage you to send a strong message to France that the United States agrees global tax rules must be updated for the digital age, but discriminatory taxes against U.S. firms are not an appropriate solution.”
In March of 2019, the French government proposed a unilateral DST on digital advertising, online platforms, and the transfer of data specifically aimed at U.S. technology companies. Under the proposal, U.S. companies could be charged up to five percent on gross revenue and it would be enacted retroactively to January 1, 2019. The French have made it explicitly clear that this proposal is designed for going after American businesses, and Finance Minister Lemaire has indicated this will raise the French over 500 million euros. This proposal undermines the global consensus-based process underway at the Organization for Economic Cooperation and Development and could encourage nations like Spain, Austria, Italy and others to move forward with their own unilateral digital services tax.
LaHood and DelBene both sit on the House Ways and Means Committee. The full letter can be read here.
