I’m still trying to learn more about the tax (my French might not be good enough for reading an untranslated text to do me much good). But it is summarized, for example, here,
The NYT discusses the possible U.S. response – tariffs, of course, as no matter the question they are often the current Administration’s preferred answer – here.
Perhaps unusually among tax experts (and Americans!), I am inclined to be sympathetic to properly designed DSTs, for reasons that I discussed here and here in response to Wei Cui’s very interesting paper on the topic (presented this past April 30 at the winter-spring 2019 NYU Tax Policy Colloquium). And I also think that an aggressive American response would be unwise, among other reasons because our friends – as I hope they still are – across the pond are addressing reasonable concerns about tax avoidance and locally generated rents.
The French DST appears to be aimed primarily at the likes of Facebook and Google Per the EY summary (and translation of some provisions) that I linked above, it would apply to:
1. “The supply, by electronic means, of a digital interface that allows users to contact and interact with other users, including for the delivery of goods or services directly between those users.”
2. “Services provided to advertisers or their agents enabling them to purchase advertising space located on a digital interface accessible by electronic means in order to display targeted advertisements to users located in France, based on data provided by such users. These services include, among others, the buying, stocking and diffusion of advertising messages and the management and communication of users’ data.”
But it would exclude, inter alia, digital interfaces that provide users with digital content, communications services, and payment services (e.g., Youtube, Netflix, and the financial intermediation industry). As I’ll discuss in my article, if one otherwise views the tax favorably, such exclusions may not be well rationalized – leaving aside the financial sector, which might call for separate and more comprehensive treatment.
Obviously this is what they call a developing story, and I’ll try to comment here when appropriate although at the moment I’m more focused on getting my arms around the issues from a broader and more conceptual standpoint.