META Meta Platforms Inc

By Noemie Bisserbe 

CHANTILLY, France -- France's finance minister said he shared the Trump administration's concerns about Facebook Inc.'s plan for its cryptocurrency, but suggested a gulf remains between Europe and the U.S. on how to tax the profits of the biggest tech companies.

Speaking on the sidelines of a meeting of the Group of Seven nations in Chantilly, France, on Wednesday, Bruno Le Maire suggested there is a broader global consensus on how to approach Libra than there is on a cross-border digital tax.

Mr. Le Maire, who also serves as economy minister, defended France's new digital tax, and expressed hope to reach a compromise soon with U.S. officials, who argue the measure discriminates against American firms.

Regarding Facebook's hopes to launch a new digital coin, Mr. Le Maire said, the necessary safeguards to prevent risks of money laundering and terror financing, weren't in place yet. "We do not want any private company to have the possibility to create a sovereign currency," Mr. Le Maire said, ahead of a meeting with G-7 finance ministers and central bankers. "We cannot accept to have a new currency having exactly the same kind of power without the same kind of rules," he added.

Mr. Le Maire's remarks come one day after Facebook executive David Marcus was questioned by senators, who said they don't trust the social-media giant to operate a global cryptocurrency.

G-7 finance ministers and central bankers were set to discuss risks posed by Libra and other cryptocurrencies. Benoît Cœuré, an executive board member of the European Central Bank, is expected to deliver a report on the topic during the meeting.

Mr. Le Maire also said he looked forward to "tough and lively discussions about the digital taxation" with U.S. Treasury Secretary Steven Mnuchin.

"I really hope we will be able to pave the way for a compromise between Steven and myself," Mr. Le Maire said, adding that the French tax doesn't target any specific companies. The two ministers are expected to hold bilateral talks this evening.

French lawmakers approved last week a new tax on large tech companies like Alphabet Inc.'s Google and Amazon.com Inc. shrugging off the threat posed by a U.S. trade probe into whether the measure discriminates against American firms.

France's new measure is the first in a series of proposed national taxes on digital services being debated across Europe. The vote came just hours after U.S. Trade Representative Robert Lighthizer said his office would investigate the tax under the same broad law the Trump administration relied on for its trade conflict with China.

The Franco-American dispute raises tension as the two countries participate in a new round of multilateral talks under the aegis of the Organization for Economic Cooperation and Development, or OECD, about how to overhaul the corporate taxation system for the digital age.

France and other European countries want a system that allocates more of Silicon Valley's profits to their territories for taxation. The U.S. wants to avoid a patchwork of unilateral taxes and opposes measures that target specifically digital companies.

Mr. Le Maire repeated his pledge that France will repeal its new tax once an agreement is reached at the OECD, and said France's proposal should give the U.S. an additional incentive to negotiate such an agreement.

The new French tax, which is retroactive to the beginning of 2019, will apply a 3% tax on revenue that companies reap in France from such activities as undertaking targeted advertising or running a digital marketplace.

Several other countries are following suit, including the U.K. and Spain, arguing that tech companies pay too little corporate tax under current rules, and that interim taxes are necessary until an international agreement is reached.

Write to Noemie Bisserbe at noemie.bisserbe@wsj.com

(END) Dow Jones Newswires

July 17, 2019 09:30 ET (13:30 GMT)

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