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France passes law taxing digital giants in defiance of US anger

France’s parliament on Thursday passed a law making it the first major economy to impose a tax on digital giants, defying a probe ordered by an angry US President Donald Trump that could trigger reprisal tariffs.

The new law aims at plugging a taxation gap that has seen some internet heavyweights paying next to nothing in countries where they make huge profits as their legal base is in smaller EU states.

The legislation — dubbed the GAFA tax in an acronym for Google, Apple, Facebook and Amazon — was passed by a simple show of hands in the Senate upper house after it was agreed by the National Assembly lower chamber earlier this month.

But the French move drew an angry response from the White House even before the legislation was passed, with Trump ordering an investigation unprecedented in the history of French-US relations.

The law will levy a 3.0 per cent tax on revenues generated from services to French consumers by the largest tech firms.

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