Amazon and Apple Refuse to Sign French Taxation Pledge

Since November of 2018, French President Emmanuel Macron has been pushing a program called Tech for Good. The program includes a list of nine primary principles, like protecting personal privacy, protecting the integrity of the internet and protecting the integrity of democratic elections. Not much controversy in the principles, but that doesn’t mean that disagreements are absent.

Because the 2020 tech event known as Viva Technology had to be canceled due to the COVID-19 pandemic, CEOs of tech companies were asked to sign a pledge that included a promise to “contribute fairly to the taxes in countries where [they] operate.”

According to a Reuters report, the French government on Monday released a list of 75 tech company CEOs who had signed a pledge to support the Tech for Good initiative. CEOs for Alphabet Inc. (NASDAQ: GOOGL), Facebook Inc. (NASDAQ: FB) and Microsoft Corp. (NASDAQ: MSFT) put their names on the pledge.

Apple Inc. (NASDAQ: AAPL) and Inc. (NASDAQ: AMZN) CEOs did not.

Those refusals are odd. The pledge itself is nonbinding, and it wouldn’t be all that out of character for Apple and Amazon to claim that they do, in fact, “contribute fairly” to taxes by paying exactly what they owe. Tax avoidance is not the same as tax evasion.

What is likely getting under the skin of Apple and Amazon is a new French tax law that went into effect last week requiring companies to pay a 3% tax if they generate more than €750 million in global revenue and €25 million in France and operate a marketplace or advertising business.

The French imposed the tax after waiting for more than a year for the Organisation for Economic Co-operation and Development to come up with a tax framework for the tech giants. When that effort stalled, the French pulled the trigger.

What’s likely to follow is that the United States will proceed to impose 100% tariffs on French products like wine and cheese. While the current U.S. president has other things on his mind, the imposition of the tariffs may slip through the cracks. Then the tariffs become President-elect Joe Biden’s problem.