French Digital Service Tax Brings France and U.S. to Negotiations

On August 26, 2019, French President Emmanuel Macron and U.S. President Donald Trump announced an agreement regarding the recently enacted three percent digital services tax (DST) in France. As part of the agreement, once an international consensus is reached at the Organization for Cooperation and Development (OECD) regarding taxation of digital enterprises, France plans to credit companies that paid the DST any amount in excess of what it would have paid under the agreed to OECD framework. 
 
The French DST, which was enacted in July 2019 and retroactively applied to income generated on or after the first of the calendar year, is intended to apply to certain covered digital services provided to, or aimed at, French users (e.g., providing an internet platform for the purpose of targeted advertising or the connection of buyers and sellers). 

In order to qualify for the tax, companies must have total annual revenues from the covered digital services of at least €750 million globally and €25 million in France. The tax legislation was immediately met with strong opposition from the U.S. government due to its anticipated disproportionate impact on U.S.-based multinational corporations. Click here to read our previous blog following the enactment of France’s DST. 

Read Transfer Pricing Times – August 2019

French Digital Service Tax Brings France and U.S. to Negotiations 2019-09-13T00:00:00.0000000 /insights/publications/transfer-pricing/transfer-pricing-times-august-2019/french-digital-service-tax-us-negotiations /-/media/assets/images/publications/transfer-pricing/transfer-pricing-times-august-2019/transfer-pricing-times.ashx publication {B062D54C-1425-4A04-8F9F-95EA14068E6D} {4C8AF8F6-BAEC-4E94-ACC7-7AC0F36685FC} {A3FAE5E6-C751-4276-AC87-234103D93C38} {2E7EDEAD-E023-488B-8F09-E024DFB699C6} {80211481-0C08-4D73-8897-1EC6A32EC65F} {39D6E6F9-3469-472B-8F01-56C403009AE2} {00DD564D-6E8A-4A1D-980F-FEF2F6DA16CF}

Related Services

Valuation Advisory

Valuation and consulting for financial reporting, federal, state and local tax, investment and risk management purposes.

Valuation Advisory

Transfer Pricing

Comprehensive transfer pricing advisory covering compliance, planning, controversy and implementation.

Transfer Pricing

Transfer Pricing Operational Services

Enhance internal strategic reviews, implementation strategies and assistance in evaluating planning structures and third-party tools.

Transfer Pricing Operational Services