French lawmakers voted to double its tax on large technology companies, risking a backlash from Donald Trump who has long threatened to retaliate against the measure with trade tariffs.
France’s lower house of parliament adopted an amendment to the 2026 budget bill late Tuesday that would potentially raise the levy on the digital revenues of firms like Amazon.com Inc., Google owner Alphabet Inc. and Facebook owner Meta Platforms Inc to 6% from 3% previously.
The change is softer than another proposal to increase the rate to 15%, but it would mark a considerable increase in a levy that has for years exacerbated transatlantic trade tensions.
Republican lawmakers have already warned that a hike to 15% would be an “unwarranted attack” on American tech companies and leave “Congress and the Trump Administration with little choice but to pursue aggressive retaliatory actions.”
The amendment is for one part of a budget bill to be voted on possibly next month or in December, and is not guaranteed to ultimately become law. The French government has no majority in parliament and has said it won’t use constitutional tools to bypass votes, effectively ceding more control to lawmakers over financial legislation.
The French government was also cautious about the move and said it would continue to work with parliament, even as the proposed amendment for the 6% rate came from lawmakers in President Emmanuel Macron’s party.
“I take note of Parliament’s desire to strengthen the tax on digital giants,” Finance Minister Roland Lescure said. “This is a matter that must be handled with care, particularly regarding the increase of thresholds, and on which we must make progress at the European level and through international discussion.”
The French government is under pressure to find measures to rein in what has become the largest deficit in the euro area. Adding to the difficulties, opposition parties are threatening to oust Prime Minister Sebastien Lecornu in no-confidence votes in the coming weeks if there aren’t significant increases in taxes on big business and the wealthiest individuals.
On Monday, the government already sought to appease lawmakers and bolster revenues with a revision to increase its initial plans for corporate tax rates.
Another amendment proposed by the far-left opposition and adopted late Tuesday would create a universal tax on multinational firms in proportion to their activity in France. Lescure said the measure would be “inoperable” as it likely infringes on 125 bilateral tax treaties France is bound by.
France was among the first countries to implement a Digital Services Tax, or DST, in 2019 that hits the revenues of global tech companies. At the time, Trump said the levy unfairly discriminated against American firms and threatened retaliation with tariffs on iconic French goods including cheese, sparkling wine and handbags.
The two sides ultimately negotiated a truce, according to which France would withdraw the DST once new global rules on taxing digital multinationals came into effect. However, the negotiations on those rules never concluded.
Lawmakers who proposed doubling the rate to 6% from 3% said the approximately €700 million ($814 million) France earns a year from the levy is still “out of proportion” with the profits made in France by major tech companies.
The amendment also changes the threshold for companies to be in scope of the tax to €2 billion of global revenue from €750 million previously.
