Dispute over French DST shows the importance of a multilateral fix


The growing dispute between the US and French Government’s highlights the importance of pursuing a multilateral solution to the taxation of multinational companies.

In their report the United States Trade Representative (USTR) has set out six reasons for why it believes the French digital services tax (DST) is discriminatory against US companies. These include:

  • USTR believes the intention and structure of the French DST is to discriminate against US companies,
  • has set out that the retroactive nature of the tax creates specific a burden on the US companies it targets,
  • the application of the tax to revenue rather than income contravenes existing tax principals and imposes specific burdens on US companies,
  • by disconnecting the tax from market presence and focusing on gross revenue the tax contravenes prevailing tax norms and creates specific burdens for US companies,
  • USTR’s evidence points to a predetermined targeting of a small group of US companies in the digital economy which it believes is unfair and is not consistent with tax principals,
  • believes that the public rational for the imposition of the DST is unpersuasive.

techUK has consistently called for the taxation of multinational companies to be addressed at the multilateral level. The French DST and the resulting dispute with the US highlights the difficulty of unilaterally pursuing these such a tax that seeks to target a small group of companies from one particular jurisdiction.

It seems likely that efforts to implement a UK DST would meet similar challenges, raising questions around the whether the UK DST would become a sticking point in any prospective US/UK trade negotiations.

The taxation of multinational companies is one of the great challenges of the modern economy, techUK has been working with the OECD and UK Government to build an effective multilateral regime. By pursuing international agreement there is the opportunity for a sustainable, long term agreement that prevents a race to the bottom on tax. This is fundamentally in the interests of national Governments and the international business community.


  • Neil Ross

    Neil Ross

    Policy Manager | Digital Economy
    T 078 4276 5470
  • Antony Walker

    Antony Walker

    Deputy CEO
    T 020 7331 2025

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