situation report

Jul 11, 2019 | 12:12 GMT

1 min read

France: Senate Approves Digital Services Tax Bill After U.S. Announces Trade Investigation

What Happened: The French Senate has approved a digital services tax bill that would implement a 3 percent tax on digital companies with French revenue of at least 25 million euros (roughly $28 million), Politico reported July 11.

Why It Matters: The bill's approval comes one day after the Office of the U.S. Trade Representative announced that it would launch an investigation into the proposed legislation under Section 301 of the Trade Act of 1974. The investigation could eventually result in U.S. countermeasures and would almost certainly complicate trade negotiations between the European Union and the United States.

Background: The European Union has been attempting to implement a similar tax on digital services on a multinational level, although the plan failed in December 2018 when France and Germany could not convince other countries, such as Ireland, to join the proposal.

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