French lawmakers are pushing to impose a digital services tax on large technology companies. Although they are worried that it will trigger US trade retaliation, they have decided to speed up the process and abandoned the previous more radical tax increase plan. The French National Assembly voted on Tuesday night to increase the digital services tax on technology companies including Google, Apple, Meta (the parent company of Facebook), and Amazon from the existing 3% to 6%.
However, the French government is opposed to the move, with Economy Minister Roland Lescure warning that if "excessive" taxes are imposed, there may be "excessive" retaliatory measures.
Initially, lawmakers proposed raising the tax rate to 15% in retaliation for U.S. President Trump's tariff policy, but the proposal was withdrawn after triggering a strong reaction from the U.S. and concerns from French companies about trade retaliation.
The amendment will not take effect until the final vote on the 2026 budget bill next week, and then needs to be approved by the Senate.
In addition to increasing the tax rate, this measure will also increase the global income threshold from 750 million euros to 2 billion euros, aiming to avoid the impact of smaller domestic companies.
John Murphy, senior vice president and head of the International Department of the U.S. Chamber of Commerce, said last week: "The new proposal appears to specifically target American companies, which is likely to trigger retaliation and affect the broader French economy. Everyone needs to remain calm."
Congressman Charles Sitzenstuhl, a member of Macron's party, said: "We did not set up this tax to harm the United States at all... I want to make it clear to our American friends who are listening, especially the embassy in France."
