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French Finance Minister Bruno Le Maire says France will proceed with taxing revenues of significant technologies firms and is urging the US not to bring trade tariffs into the debate on how to pretty raise levies on digital solutions.

Le Maire was responding to US President Donald Trump’s threat to tax French wines in retaliation for France’s digital solutions tax, which he says unjustly targets US providers like Google and Facebook.

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French Economy Minister Bruno Le Maire addresses journalists after US President Donald Trump vowed
French Economy Minister Bruno Le Maire addresses journalists just after US President Donald Trump vowed “substantial” retaliation against France for a tax targeting US tech giants. Image: AFP

“It’s in our interest to have a fair digital tax,” Mr Le Maire told reporters on Saturday.

“Please do not mix the two troubles.

The crucial query now is how we can we get consensus on fair taxation of digital activities.” Two weeks ago, the French Senate authorized the three per cent levy that will apply to income from digital solutions earned in France by providers with far more than 25 million euros ($A40 million) in French income and 750 million euros ($A1.two billion) worldwide.

Other EU nations, like Austria, Britain, Spain and Italy, have also announced plans for their personal digital taxes.

French President Emmanuel Macron and US President Donald Trump are at loggerheads over a tech tax. Picture: Ian Langsdon/AP
French President Emmanuel Macron and US President Donald Trump are at loggerheads more than a tech tax. Image: Ian Langsdon/AP

Mr Trump blasted Mr Macron’s “foolishness” for pressing ahead with the French levy and warned his administration would announce “substantial reciprocal action”.

“They shouldn’t have performed this,” Mr Trump told reporters on Friday.

“I told them, I stated, ‘don’t do it due to the fact if you do it, I’m going to tax your wine’.”

Mr Le Maire reiterated Mr Macron’s assurance that France would lift its national digital tax if there was a deal on a universal tax at the level of the Organisation for Financial Co-operation and Improvement (OECD).

Finance ministers and banks governors attend a session at the G-7 Finance Wednesday July 17, 2019 in Chantilly, north of Paris. Picture: AP Photo/Michel Euler
Finance ministers and banks governors attend a session at the G-7 Finance Wednesday July 17, 2019 in Chantilly, north of Paris. Image: AP Photo/Michel Euler

He added that France wanted leaders of the G7 group of nations to agree on the principle of universal taxation of digital activities at subsequent month’s summit in the coastal resort of Biarritz.

According to Mr Le Maire’s workplace, he added, “the universal taxation of digital activity is a challenge that issues us all.”

He stated the tax is meant as a short-term measure pending negotiations on an international tax deal.

The French measure does not only target US providers, and only issues revenues inside France, notably of providers that use customer information to sell on the web marketing.

It is made to quit multinationals from avoiding French taxes by setting up European headquarters in low-tax EU nations.

Initially published as France proceeds with tech tax in spite of Trump

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