The move sets the stage for a transatlantic clash just before Trump leaves office.
That could put the incoming US administration in a difficult position as it seeks to address Covid-19 and economic fallout from the pandemic. President-elect Joe Biden has pledged to rebuild relationships with key allies. But Democrats have previously opposed such digital services taxes, which they’ve claimed unfairly target US companies.
French finance minister Bruno Le Maire said earlier this week that he hopes to convince Biden to re-engage with the OECD process so an agreement can be reached. The French government had consistently said the taxes would come back into effect in December in the absence of a deal, he added.
The debate over how tech companies should be taxed has been going on for years.
Historically, companies have only been required to pay taxes on income in the country where they book their profits. But European countries argue they should also be able to collect so-called digital services taxes, given that these companies make big profits off sales in the region. The United Kingdom, Italy and Austria have implemented similar measures.
— Barbara Wojazer, Gaëlle Fournier and Pierre Bairin contributed reporting.
