US warns France against new tax on digital giants

America has warned France to drop plans for a tax on digital leaders such as Facebook and Apple, saying it would hurt American business.

US Secretary of State Mike Pompeo raised his objections as he met French Foreign Minister Jean-Yves Le Drian in Washington on Thursday during 70th anniversary celebrations for the NATO alliance.

"Secretary Pompeo urged France not to approve a digital services tax, which would negatively impact large US technology firms and the French citizens who use them," the State Department said in a statement.

France last month unveiled draft legislation to set a three per cent tax on digital advertising, the sale of personal data and other revenue from any technology company that earns more than €750 million worldwide each year.

READ ALSO: France nears implementation of digital tax

The effort comes amid rising public outrage at the minimal tax paid by some of the world's richest firms which base operations in jurisdictions that charge low rates.

France has led the effort after a European Union-wide effort was scuttled by low-tax countries such as Ireland, which have wooed big technology firms.

Other countries are considering following France's lead including Britain, Spain, Austria and Italy.

The State Department said that Pompeo also spoke to Le Drian about the fate of foreign fighters from Syria.

The United States has been pressing France and other Western countries to bring back and try at home their citizens who joined the Islamic State movement as Washington prepares to withdraw troops.

Repatriation is a deeply unattractive option for European states, which have recent experience with attacks.