The Government of France has passed a law that taxes tech giants operating in the region such as Facebook and Google.
Large tech conglomerates have for a long time now been accused of exploiting loopholes in global tax systems to avoid paying tax.
The country will levy a 3% tax on all sales generated within France by these firms.
This tax will apply to any digital company with at least USD 35 Million, of more than USD 850 Million in revenues, is generated in France.
In defense of this decision, French Finance Minister Bruno Le Maore said, “I want to tell our American friends that this should be an incentive for them to accelerate even more our work to find an agreement on the international taxation of digital services.”
He added that the country is sovereign and as such decides its own rules.
The tax law has been dubbed GAFA tax, where GAFA is an acronym for Google, Apple, Facebook and Amazon.
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The four are all American companies, which has sparked outrage from Washington, which says the tax unfairly targets American companies.
US President Trump ordered an inquiry into the tax, which will investigate it to determine its effects and whether or not there are any discriminatory aspects to it.
