Digital tax is a new tax policy formulated by many countries and regions in recent years to deal with the problem of excessively low tax payments by large multinational technology companies.
The large multinational technology companies here mainly refer to American technology giants, such as Facebook, Amazon, Google, Apple, etc.
These technology giants are thought to make amazing profits from various markets around the world, but the general taxes paid locally and the economic contribution generated are very, very low.
To this end, countries such as India, France, and Italy have already established digital taxes, which has led the US government, led by Trump, to feel that its interests have been harmed.
The digital tax controversy has now risen to tariff barriers, because of the digital tax issue, the US government and the US Trade Representative Office are launching tariff retaliatory measures.
In previous negotiations, the French government believed that a digital tax increase was necessary because these giants would only plunder economic gains.
So even after the US government has repeatedly emphasized that retaliation may be ushered in if a digital tax is imposed, the French government still firmly implements the digital tax but has not yet begun.
Recently, the Office of the United States Trade Representative has drawn up a list to impose a 25% tariff on French products worth US$1.3 billion, which is actually revenge on the French digital tax. Of course, the US government still seems to want to continue the negotiations and does not want to make things bigger.
However, France and other countries have complained about the multinational technology companies’ grievances, so the digital tax is also a heavy burden. It is estimated that the tax will not be abandoned even if it is retaliated.