France Starts Digital Tax On Amazon, Facebook, Google

France has implemented a digital tax on tech giants such as Google and Facebook after the European Union failed to reach an agreement before Christmas.

France had indicated last month it would press ahead with its own taxation on tech firms after EU finance ministers failed to agree a tax on digital revenues in December, despite France and Germany championing a compromise digital tax that was much narrower in scope than a plan originally proposed in the spring of 2018.

They had proposed 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.

Tech tax

But this compromise failed to be agreed, leaving France to press ahead with its own tax which came into force on 1 January 2019.

France’s so-called GAFA tax targets major digital firms and hopes to raise €500 million (£451m).

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 been defeated in its previous form, due to opposition by Ireland, Scandinavian countries and Luxembourg. It needs unanimous approval by member states.

A number of countries, including the UK, have proposed national digital taxes with a broader base.

Austria is reportedly the next European nation looking to impose a specialised ‘tech tax’ on tech giants.

Digital ads

France and Germany meanwhile have reportedly also reached agreement on a 3 percent tax on digital ads, and plan to introduce it in 2021 unless OECD members agree a global approach before that date.

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”.

Do you know all about IT and the law? Take our quiz.

Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

Recent Posts

Sectigo Warns 40 Percent Of SMBs Are Attacked Monthly

Survey finds that 50 percent of SMBs have suffered a website breach at some point,…

15 mins ago

Amazon Accused Of Systemic Discrimination In Lawsuit

Female executive at AWS accuses e-commerce giant of discrimination against black people and hired Harvey…

3 hours ago

US To Squeeze Chip Choke Points To Thwart China Ambitions

US national security commission recommends tightening up 'choke points' on chip manufacturing, to safeguard American…

4 hours ago

Silicon UK In Focus Podcast: Digital Services and Digital Markets Acts

The Digital Services and Digital Markets Acts are new pieces of legislation from the EU.…

1 day ago

Twitter Confirms ‘Super Follow’ Option, For Paid Content

Money maker. Super follow feature coming soon on Twitter, will allow users to receive tips…

4 days ago

Windows 10 ‘Sun Valley’ Promises Major Overhaul

OS refresh. Major update to six year old Windows 10 operating system, dubbed Sun Valley,…

4 days ago