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Senators Ask Mnuchin to Block ‘Discriminatory’ French Digital Tax

June 24, 2019, 6:15 PM

Two top senators on the Senate Finance Committee urged Treasury Secretary Steven Mnuchin to double the corporate tax rate on French companies to discourage France from imposing a digital services tax.

“In recognition of the gravity of this situation, we ask that you consider all available tools under U.S. law to address such targeted, discriminatory taxation,” committee Chairman Chuck Grassley (R-Iowa) and ranking member Ron Wyden (D-Ore.) said in a June 24 letter.

  • The lawmakers asked Mnuchin to consider using tax code Section 891 to block France from implementing its digital services tax plan. The code section would enable the Internal Revenue Service to double the U.S. tax rate on French citizens and companies.
  • France proposed a 3% tax on revenue from digital advertising, user data sales, and third-party platforms from companies with at least 750 million euros ($843 million) in worldwide revenue and 25 million euros in domestic revenue.
  • The Organization for Economic Cooperation and Development is working on building global consensus to fix the mismatch between where companies earn profits and where they are taxed. U.S. officials are concerned that unilateral measures from countries like France, India, Poland, and Italy are threatening negotiations.

To contact the reporter on this story: Siri Bulusu in Washington at sbulusu@bloombergtax.com

To contact the editors responsible for this story: Meg Shreve at mshreve@bloombergtax.com; Karen Saunders at ksaunders@bloombergtax.com

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