France unveils plan to tax internet giants

08 March, 2019, 10:09 | Author: Billie Castillo
  • France wants to lead the way in making internet giants pay taxes on digital sales where they take place

At the moment, large digital companies tend to pay less than 10% tax in the European Union, giving them a massive advantage over traditional businesses that pay an effective rate above 23%. This can mean they pay virtually no tax in countries where they bring in most of their sales.

On Sunday, the 3rd of March, the French Finance Minister, Bruno Le Maire told that a three percent tax on the large internet service providers could generate as many as 568.5 million pounds (500 million euros) per year.

The latest report shows that the U.S. and China might talk regarding France regarding this new digital tax since many companies are getting affected because of it.

Le Maire said he would now push for an worldwide deal by the end of the year at the Organization for Economic Cooperation and Development (OECD), a Paris-based forum made up mostly of developed nations.

He further said, "The Organisation for Economic Cooperation and Development would create a new political accord on digital and data taxation".

"This is about justice", Le Maire reportedly said.

The Finance Minister noted that levying of new tax regulations would not violate any terms of tax agreement which France signed with the United States.

The French tax will apply retroactively to the beginning of 2019, making it one of the first such taxes to go on the books anywhere in the world. It will also apply to online services companies like Airbnb and Uber.

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Le Maire quoted figures from the European Commission, the EU executive body, showing that the major digital tech companies pay on average 14 percentage points less tax than other European companies.

Under EU law, internet giants can choose to report their income in any member state, prompting them to choose low-tax nations such as Ireland, the Netherlands or Luxembourg.

France is not the only European country that is calling for a digital tax to be adopted.

Left-wing politicians denounced the measure as too feeble.

Britain, Spain and Italy are also working on national versions of a new digital tax, while Japan, Singapore and India are planning schemes of their own.

The French bill is being presented as the government seeks ways of paying for financial relief measures to ease the "yellow vest" protests that have roiled the country for three months.

Raphael Pradeau from the anti-globalisation Attac lobby group said the proposed French tax is "symbolic and does not solve the problem of massive fiscal evasion".

The French government has introduced a 3pc tax on the French revenues of internet giants like Google, Amazon and Facebook.



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