US initiates action against France’s Digital Services Tax

On 10 July 2019, the United States Trade Representative (USTR) announced it would commence an investigation under Section 301 of the Trade Act of 1974 into France’s pending Digital Services Tax. The DST legislation in France, which is moving through the French legislative process, is the farthest advanced, but many other countries around the world also are considering the enactment of such a tax that would apply to digital businesses based on the local presence of users. The US action is utilizing the trade mechanism under Section 301 to address what is seen as unfair treatment of US-based companies under the DST.

Source EY