According to recent reports, French Finance Minister Bruno Le Maire has confirmed that France will be levying a digital services tax (DST) for 2020 regardless of the outcome of discussions at the level of the OECD. According to Le Maire, in the event international agreement is reached by the end of the year, digital companies will be taxed as agreed, and if no international agreement is reached, then such companies will be taxed under the French DST.
Given the impact of the COVID-19 pandemic, it is becoming more likely that international agreement will not be reached by the end of the year and the French DST will be imposed. At the same time, according to Le Maire, a digital tax has never been more legitimate and more necessary, with digital companies doing better than most during the pandemic.
Note - France reached agreement with the U.S. earlier in the year to suspend payment of the 3% French DST until December 2020. At the time, the French position was that the DST would only be repealed if international agreement is reached, which as per the recent confirmation, remains the case.
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