France has approved a digital services tax despite threats of retaliation by the US, which argues that it unfairly targets American tech giants.

Axar.az reports citing BBC.

The 3% tax will be levied on sales generated in France by multinational firms like Google and Facebook.

The French government has argued that such firms headquartered outside the country pay little or no tax.

The US administration has ordered an inquiry into the move - which could result in retaliatory tariffs.

The new tax was approved by the French senate on Thursday, a week after it was passed by the lower house, the National Assembly.

Any digital company with revenue of more than €750m ($850m; £670m) - of which at least €25m is generated in France - would be subject to the levy.

It will be retroactively applied from early 2019, and is expected to raise about €400m this year.