France To Press Ahead With Digital Tax In 2019

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Tax on tech giants will begin in 2019 by individual nations if necessary, warns French finance minister

The French have signalled their willingness for each country to press ahead with their own digital tax on tech giants such as Google and Facebook if European agreement cannot be reached.

It comes after France and Germany this week spearheaded a compromise digital tax that was much narrower in scope than a plan originally proposed this spring.

That proposal made by France and Germany at a meeting of EU finance ministers on Tuesday envisaged a 3 percent tax on European advertising sales by digital companies, rather than the broad tax on the total revenues of large digital firms originally suggested.

tax

Tech tax

This watered-down tax would take in about half of the 5 billion euros (£4.46bn) targeted by the initial plan, and would mainly affect Google and Facebook, but leave the likes of Apple, Amazon and Airbnb unaffected.

But despite the watered down French and German plan, EU finance ministers failed to agree a tax on digital revenues on Tuesday.

The tax has long been championed by French president Emmanuel Macron as a way to show that governments are capable of taking action to rein in large tech companies, which are seen as paying minimal tax in Europe due to their use of accounting loopholes.

The digital tax had faced defeat in its previous form, due to opposition by Ireland, Scandinavian countries and Luxembourg.

A number of countries, including the UK, have proposed national digital taxes with a broader base, and the proposal doesn’t stand in the way of those plans.

French warning

And now following the lack of European agreement, it seems that the French believe pressing ahead with individual country-by-country taxes may be the way forward.

French finance minister Bruno Le Maire was quoted by Reuters on Thursday as saying that France will tax digital giants at a national level from 2019 if European Union states cannot reach an agreement on a tax on digital revenues for the bloc.

“I am giving myself until March to reach a deal on a European tax on digital giants,” Le Maire was quoted as telling France 2 television.

“If it doesn’t work out, we will do it at a national level, from 2019,” he added.

The French warning comes amid a difficult period for the French government, which is dealing with nationwide protests against the high cost of living and economic policies.

The French had to postpone an unpopular rise in tax on petrol earlier this week.

For their part, tech companies have previously defended their tax structures, and insist they abide by tax laws as they’re currently written.

But British MPs have previously criticised tech companies’ tax arrangements as “immoral”.

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Author: Tom Jowitt
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