August 2, 2019 / 4:46 PM / 22 days ago

Amazon says French digital tax will hit consumers, small firms

FILE PHOTO: The company's logo outside an Amazon pop-up store in Berlin, Germany, November 22, 2018. REUTERS/Fabrizio Bensch/File Photo

PARIS (Reuters) - Amazon said on Friday it would pass on the cost of a new French digital tax to consumers and business partners, warning that the measure could make it harder for some small businesses in France to compete against foreign rivals.

The French Senate voted last month to approve a 3% levy on tech giants’ revenue from digital services earned in France, riling U.S. President Donald Trump, who threatened to impose retaliatory duties on French wine.

“We are not in a position to absorb an additional tax based on revenue rather than profit,” Amazon said in a statement, citing tough competition in the “low-margin retail sector” and its significant investment in digital tools and services.

“We have no other option than to pass it on,” Amazon said. “We recognize that this could put small French companies at a competitive disadvantage to their competitors in other countries, as we have ... warned the authorities.”

France’s finance minister said on Saturday that France would push ahead with the digital tax while supporting efforts to agree on an international levy through the Organisation for Economic Cooperation and Development (OECD).

Other European Union countries including Austria, Britain, Spain and Italy, have also announced plans for their own digital taxes.

Reporting by Laurence Frost; Editing by Edmund Blair

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