France to go ahead with digital tax risking US tariffs

France will go ahead with plans to collect its contentious digital services tax mid-December, Finance Minister Bruno Le Maire said, keeping Europe on course for a trade battle with the U.S. over the taxation of tech giants like Facebook Inc. and Alphabet Inc.’s Google.

The French government suspended the payment of its national levy on digital revenues as the U.S. agreed to hold off on retaliatory tariffs. The truce was designed to give time for international negotiations to find a global deal this year on new rules for taxing profits in the digital era. But those talks have stumbled and won’t conclude until mid-2021.

Speaking to reporters after a meeting of the Group of 20 leading economies, Le Maire said the U.S. has blocked any agreement in the negotiations run by the Organization for Economic Cooperation and Development. Europe must now press ahead with a tax like France’s, he said.

“The only question we have to ask is whether we can accept that the big winners of this crisis, the digital giants, should continue to be taxed less than other big companies—my answer is no, and thrice no,” Le Maire said.

Le Maire added that he didn’t expect any major change in the clash with the U.S., even if Joe Biden wins November’s election.

“There could be a change on the question of sanctions and how the U.S. will behave with Europe,” he said. “But I’m more skeptical about fundamental change in the U.S. position on digital tax.”