French Finance Minister Bruno Le Maire has admitted that Paris’ talks with Washington on the taxation of digital companies “remained difficult” even as the two sides vowed to shun a trade war.
He praised a truce that was clinched by France’s President Emmanuel Macron and his US counterpart Donald Trump on Monday, which Le Maire said was a "very positive starting point".
But he admitted that the sides had yet to arrive at a final agreement.
Slapping a minimum tax rate on companies which currently pay no levies remains a priority, according to Le Maire.
This comes after Reuters cited an unnamed source as saying on Monday that US President Donald Trump had agreed to hold off on tariffs with France until digital tax negotiations at the Organisation for Economic Cooperation and Development (OECD) are over.
This came as Macron took to Twitter to hail what he described as a “great discussion” with Trump over the digital tax.
Great discussion with @realDonaldTrump on digital tax. We will work together on a good agreement to avoid tariff escalation.— Emmanuel Macron (@EmmanuelMacron) January 20, 2020
The talks follow Trump’s threat last year to impose tariffs on French goods in retaliation for France's new digital service tax on the annual revenues of mostly American companies.
The United States launched a probe into the tax, which it describes as “discriminatory or unreasonable” and “burdens or restricts United States commerce”.
The three-percent tax, called "GAFA" by the French media (an acronym that means Google, Apple, Facebook and Amazon) targets digital companies with global annual sales of more than €750 million ($849 million) and sales in France of at least €25 million ($27.7 million).