France's lower house of parliament approves raising digital services tax on tech giants from 3% to 6%, but the government remains cautious amid fears of US retaliation
The French National Assembly, the lower house of parliament, has passed a bill to raise taxes on major American companies such as Google, Apple, and Amazon from the current 3% to 6%. However, the government is reportedly cautious about this move, fearing retaliatory measures from the United States.
French lawmakers progress tax on American Big Tech amid huge pushback – POLITICO
France Risks Trump Ire as Lawmakers Vote to Raise Tech Tax - Bloomberg
In October 2025, the National Assembly passed an amendment to the 2026 budget, which included raising tax on the revenues of major tech companies from 3% to 6%.
In 2019, France introduced a 'digital services tax,' imposing a 3% tax on revenues on companies that generate a certain amount of revenue. France's digital services tax differs from similar measures adopted by other countries in that it targets a wider range of digital activities. This tax was expected to protect domestic small and medium-sized enterprises while also restraining foreign companies that generate large amounts of revenue.
The measure has been criticised for depriving loss-making companies of revenue because it taxes revenue rather than profits, and for unfairly distinguishing between French and non-French companies, and between digital and non-digital services, violating the principle of equality under the law.
Foreign governments have also expressed reservations about this policy, with the United States in particular threatening to impose retaliatory tariffs in 2020 during the first Trump administration. When the National Assembly initially considered raising the digital tax to up to 15% in the 2026 budget proposal, Jason Smith, chairman of the U.S. House of Representatives, warned of retaliatory measures, accusing the measure of 'indiscriminately targeting major U.S. digital companies.'
The revised bill will raise the digital services tax from 3% to 6%. Meanwhile, the threshold for corporate revenues to be taxed will be raised from 750 million euros (approximately 130 billion yen) to 2 billion euros (approximately 350 billion yen). The aim of raising the threshold is believed to be to protect domestic small and medium-sized enterprises by exempting them from the tax.
The amendment passed by the Chamber of Deputies, but the government opposes the move. Economy Minister Laurent Lescours warned that 'disproportionate taxation will lead to disproportionate retaliation,' and supported a cautious approach. 'I understand that Parliament wants to increase taxation, but this is a sensitive issue that must be advanced through a European or international discussion,' he said.
The amendment must be approved by the Senate after a final vote in the upcoming 2026 budget bill.
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