Ways and Means Committee Republican Leaders Slam French Proposal to Impose Higher Discriminatory Digital Services Tax on U.S. Innovators

WASHINGTON, D.C. - As lawmakers in France are considering a proposal to increase its digital services tax (DST) from 3 percent to 15 percent and raise the applicable revenue threshold to levels that specifically target American innovators, Ways and Means Committee Chairman Jason Smith (MO-08), Subcommittee on Tax Chairman Mike Kelly (PA-16), and Subcommittee on Trade Chairman Adrian Smith (NE-03) issued the following statement:

"France's proposed increase in its digital services tax would be an unwarranted attack on America's digital companies and leave the U.S. Congress and the Trump Administration with little choice but to pursue aggressive retaliatory actions. Congressional Republicans have been consistently adamant that we will not abide France, or any country for that matter, imposing discriminatory taxes against American businesses. President Biden lacked the courage to use trade policies to defend America's interest and gave away leverage by pausing Section 301 investigations that the Trump Administration began against DSTs around the world. President Trump has proven time and again that he will staunchly defend American workers, producers, and innovators against unfair trade practices and discriminatory tax regimes - with proven results.

"Should France move forward with raising its digital services tax five-fold to target American digital companies, the Ways and Means Committee will work with President Trump to respond in a manner consistent with the president's America First trade policy. For example, when the OECD's global tax scheme threatened to unfairly tax American businesses, Ways and Means Republicans did not hesitate to introduce and advance legislation through the U.S. House of Representatives to protect our nation's interests overseas. We will defend American workers and businesses by making clear to all nations that it's better to work with the U.S. than against us."

BACKGROUND

Rep. Kelly has previously led efforts in Congress to oppose the Organization for Economic Co-operation and Development's (OECD) global minimum tax, known as Pillar 2, what Rep. Kelly called a poorly negotiated by the Biden Administration. During a 2023 hearing, Kelly highlighted how the United States stands to lose over $120 billion in tax revenues under Pillar 2.

"The original idea of engaging in negotiations at the OECD was this: other countries could join the U.S. with their own global minimum taxes and we could stop the proliferation of (Digital Services Taxes). Unfortunately, that's not what happened at all," Rep. Kelly said in prepared remarks.

You can watch Rep. Kelly's opening statement and full committee hearing here and learn more here.