Detente is ending in the global fight over tech taxes. Earlier this year, France agreed to suspend collection of a tax on digital revenue from large technology companies such as Facebook, Amazon and Alphabet’s Google. Meanwhile, the U.S. delayed the application of tariffs it was putting on French goods in retaliation for the tax. But now France has resumed collecting what is known as its digital-services tax, a French official said. Other countries, including Italy and the U.K., whose similar taxes went into effect this year, are also set to begin collection in coming months. From a report: The U.S., meanwhile, is set on Jan. 6 to impose tariffs on $1.3 billion of French imports, including cosmetics and handbags. Washington also has pending investigations that could lead to similar tariffs on 10 other countries, including the U.K., Italy, India and Spain. At issue in the dispute is how to tax an increasingly digital economy. For decades, tax treaties have generally allocated corporate profit based on where value is created. But modern multinationals — particularly ones with digital offerings — can sell their products across borders in ways that leave little taxable profit in a country where those products are consumed.

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France and some other big European countries say tech companies should pay more taxes in the countries where their users and clients are located, something that could boost their tax revenues. But in long-running multilateral talks on how to update the tax system, the U.S. has opposed any solution that is too targeted at tech companies — slowing progress. “These taxes are a reaction to dissatisfaction with how long it has taken to get a global multilateral solution,” said Manal Corwin, who served as deputy assistant secretary for international affairs at the U.S. Treasury Department in the Obama administration, and now works at accounting firm KPMG. “You may need some trade battles back and forth before there’s a strong incentive to say, ‘OK, enough.'”

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