Since the announcement of the France’s ‘digital tax’, Amazon has severely criticised it as ‘poorly constructed and ‘discriminatory’. The e-commerce giant has finally found a way a dodge it by passing it on to its small and medium-sized sellers, who would now be paying 3% additional duty. It would be the French sellers and the American sellers selling products in France would be bearing the additional cost. The company said that the tax would be implemented from October 1.
Amazon’s director of international tax policy and planning, Peter Hiltz, during a hearing held by the US Trade Representative in Washington, said, “We cannot absorb this expense if we are to continue making investments in infrastructure.”
‘Digital tax’ is the tariff which European nations would levy on the big tech firms over their income earned inside a country even if their headquarters are located somewhere else. Besides Amazon, other to decry the move include Facebook, Google and Apple. The companies criticised the tax which they called ‘complex to calculate’ and is a hindrance to global business.
Last month, French lawmakers passed the tax on technology companies like Google, Amazon and Facebook, despite US warning of unfairly targeting US tech giants. France is the first European country to pass such a law, though Britain and Germany are also going to follow the suit.
US President Donald Trump ordered investigation into the tax for he finds it unreasonable as it would burden US economy and discriminatory as it targets only US giant tech firms like Google, Apple, Facebook and Amazon. Trump has threatened to impose heavy tariffs on goods imported from the nations who would impose it of it. It is suspected to initiate one more trade war, after US-China and US-EU tariff conflict, hampering the global economy.
The tax levies 3% duty over the revenue earned by the internet companies for their digital services in France. Paris proposed that the tax would be applicable on any digital company which earns over €750million per year and makes revenue of at least €25million from France. So far about 30 companies fall into the ambit of this tax.
Responding to US threats French finance minister, Bruno Le Maire, in a tough tone told the Guardian, “We will never give up. We are implementing a digital tax on digital giants because we think it is a fair and efficient way of taxing them.”
He also sent message across, saying, “France is sovereign, and France decides its own tax rules. And this will continue to be the case.” The tax is estimated to generate about €400million by the end of 2019.