ABANDONMENT OF THE GAFA TAX BY FRANCE

FACING THE UNITED STATES

The tenant of the White House managed to obtain the suspension of the famous GAFA tax until a date fixed beyond Tuesday, November 3, ie the day of the American elections.

The famous Gafa tax was implemented by France in early 2019. It consists of a taxation of 3% of the turnover of large web companies which generate at least 750 million euros in revenue worldwide, and more 25 million euros in France.

This cordial agreement arrived just hours before the Choose France event during which 200 French and foreign business leaders gathered in Versailles to talk about industrial investments and research & development.

The avowed aim of these negotiations was to avoid an economic war which could have cost France 2.4 billion dollars. Donald Trump had indeed planned to tax French exports as a response to this tax deemed "discriminating" and "unreasonable" by the US administration.

It was not in the interest of France to start a trade war with the United States, especially since the Minister of the Economy, currently in Davos, must meet his American counterpart to discuss (yet) negotiations to be carried out within the framework of the OECD, perceived as being the “right format” for laying down the rules of the game.

The matamore Bruno Le Maire, in Davos where he should meet Steven Mnuchin, his American counterpart, had to give up !