Macron and Trump agree to digital tax delay

French president Emmanuel Macron has said he and US president Donald Trump will collaborate over France's planned digital tax to avoid an increase in tariffs.

Reuters reported that after talks over the weekend, they agreed to put a hold on their tariff disagreement until 2021.

Meanwhile, French news agency AFP said that the two presidents agreed to try and "find a solution in an international framework" to avoid "a trade war that will benefit no one".

Macron tweeted on Monday that he had had a "great discussion" with Trump on the issue, adding “we will work together on a good agreement to avoid tariff escalation”.

France announced last July that it would impose a three per cent levy on revenue from digital services earned in France by firms with revenues of more than €25 million in France and €750 million worldwide.

Washington then accused Paris of singling out US tech giants like Amazon, Apple, Facebook and Google, threatening to apply taxes up to 100 per cent of the value of imported French products.

French finance minister Bruno Le Maire is set to meet US treasury secretary Steven Mnuchin at the World Economic Forum in Davos this week.

The two countries are expected to continue negotiations over the digital tax at the Organization for Economic Cooperation and Development (OECD), with the French presidency stating this week: "France is pursuing its objective of fair taxation on digital companies and finding a compromise within the framework of the OECD.”

Commenting on the latest development, Andersen Tax UK’s head of international tax Miles Dean said: "Sense has prevailed; going it alone without international consensus would prove costly and damaging to wider trading relationships.

"Hopefully the UK will take note and agree that now is not the time to introduce another Google type tax."

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