French, US officials strike draft compromise on French digital tax

Reuters
Updated

BIARRITZ, France, Aug 26 (Reuters) - French and U.S. negotiators have reached a compromise agreement on France's digital tax, a levy which prompted U.S. President Donald Trump to threaten a separate tax on French wine imports, a source close to the negotiations said.

The compromise struck between French Finance Minister Bruno Le Maire, U.S. Treasury Secretary Steven Mnuchin and Donald Trump's White House economic adviser Larry Kudlow envisages that France would repay to companies the difference between a French tax and a planned mechanism being drawn up by the OECD .

The draft agreement will be submitted to Trump and French President Emmanuel Macron later on Monday at a G7 leaders summit.

"Trump's advisor is OK with the proposal," the source told Reuters. "That would be the mechanism at this stage, that's the joint proposal." (Reporting by Michel Rose; editing by Richard Lough)