The U.S. Trade Representative’s office is not happy about certain international digital tax laws, which it claims is unfair to American tech giants.
According to Reuters, taxes on digital services imposed by France, India, Italy and Turkey are “inconsistent” with international tax principles. They could, in turn, result in retaliatory tariffs being put in place by the United States.
Apple is one of the companies the USTR says could be damaged by these laws. Others include Facebook, Google, and Amazon. One of the main criticisms is that these laws — which differ depending on the market — seek to tax revenue rather than income, among other things.
One that is under particular scrutiny is a French digital services tax. France’s digital services tax aims to tax firms 3% on earnings online sales, alongside digital advertising and the sale of private data. While Apple does not engage in two of these, it does make significant sales online. The French law has already seen the country demand hundreds of millions of dollars in payments.
U.S. retaliates
In response, the U.S. has imposed its own 25% tariffs on French products including cosmetics, handbags, and other imports. These are supposedly valued at around $1.3 billion annually.
Apple’s tax contributions — along with those of other big international tech firms — have caused plenty of debate over recent years. The accusation is that these companies shuttle profits around the world and take advantage of complex tax structures to avoid paying what they owe. Apple has always denied that this is the case. Nonetheless, it has resulted in some heavily publicized fines — such as a $14.8 billion tax bill leveled at Apple by the EU several years ago. Apple has successfully beaten the tax demand in court, although the case continues.
Source: Reuters
