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France to start collecting digital tax from US tech giants in December

The country expects to raise 400 million euros, or about $476 million, this year from the tax.

France's digital tax focuses on tech companies.

France plans to begin collecting its new digital tax from big tech companies in December, and the country's Finance Ministry has sent out notices to the affected companies to tell them so, Reuters reported Wednesday.

The 3% tax, applies to companies with annual revenue of more than 25 million euros ($28 million) in France and 750 million euros ($832 million) worldwide. The new taxation regime was introduced last year, but France delayed collecting the money from tech companies after it attracted the ire of US President Donald Trump. 

Trump interpreted it as a direct attack on the success of US tech giants. He threatened to retaliate by imposing tariffs on French goods, including champagne and handbags, imported to the US.

Earlier this year, France agreed a temporary truce with Trump over the tax to avoid a tariff war. It was thought that France's tax rules might be superseded by the rewrite of international tax rules by the Organization for Economic Cooperation and Development. But these new tax laws have been now delayed until next year, and France isn't willing to put off collecting tax from big tech indefinitely.

France was always planning to start collecting the tax in December, and the country's 2021 budget bill reveals that country expects the tax to raise 400 million euros this year. The Finance Ministry still plans to withdraw its tax once a new international tax framework is put in place.