French Digital Tax To Swell Government Coffers

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Nice little earner. French finance minister predicts its digital tax could bring in half a billion pounds a year

Finances of the French government will be bolstered by the digital tax that France imposed on tech giants such as Amazon, Google and Facebook on 1 January 2019.

At the weekend, French Finance Minister Bruno Le Maire told a French newspaper that the three percent tax could help could yield 500m euros (£568.5m pounds) per year.

The claim comes as it emerged that Germany last month is also considering introducing its own ‘digital tax’ on tech giants.

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French tax

According to Reuters, Bruno Le Maire told the Le Parisien newspaper on Sunday that the tax is aimed at companies with worldwide digital revenue of at least 750 million and French revenue of more than 25 million euros.

He identified the tax as affecting an estimated 30 companies, most of which are based in the United States. That said, they are apparently some firms from China, Spain, and the UK, as well as one French firm that will also be forced to contribute to the digital tax.

The usual suspects are on this list, including Google, Amazon, Facebook and Apple. Other firms include the likes of Uber, Airbnb, Booking and French online advertising specialist Criteo.

“A taxation system for the 21st century has to built on what has value today, and that is data,” Le Maire reportedly said.

He added it is also a matter of fiscal justice, as the digital giants pay some 14 percentage points less tax than European small-and-medium sized companies.

In order to avoid penalizing companies who already pay taxes in France, the amount paid will be deductible from pretax income, Le Maire said.

European tax

France is not the only European country that is thinking of requiring tech firms to pay more in taxes.

The European Union is reportedly close to reaching an agreement by March to implement a digital services tax.

The EU 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.

The European Union tax was only intended as an interim measure until a consensus was reached by the Organisation for Economic Co-operation and Development (OECD), across the world.

The UK has also proposed a national digital tax.

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

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Author: Tom Jowitt
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