France to introduce 5% digital tax
France intends to tax the revenue of about 30 internet giants, such as Amazon, to help ensure “fiscal justice,” according to the country’s Finance Minister Bruno Le Maire.
A 3-5% tax on the French revenue of large internet companies could yield France €500m per year, Mr Le Maire said yesterday. He said the tax is aimed at companies with worldwide digital revenue of at least €750m and French revenue of more than €25m.
He said the tax would target mostly American companies, but also Chinese, German, Spanish, and British, as well as one French firm and several firms with French origins that have been bought by foreign companies.
Google, Amazon, Facebook, and Apple are set to be targeted, but also Uber, Airbnb, Booking.com, and French online advertising specialist Criteo. Mr Le Maire said there was no risk of the new measure clashing with a tax agreement between France and the US. He discussed the plan with Steven Mnuchin during the US treasury secretary’s stop in Paris late last month.
“A taxation system for the 21st century has to built on what has value today, and that is data,” Mr Le Maire said.
He added it is also a matter of fiscal justice, as the digital giants pay some 14 percentage points less tax than European SMEs.
Fairer taxes are a key demand of the “yellow vest” protests seen across France in the past three months. Mr Le Maire said the tax would target platform companies that earn a commission on putting other companies in touch with customers.
Companies selling their products on their own websites would not be targeted, such as French electronics retailer Darty. The French government will discuss the plan on Wednesday.
Visiting Dublin last week, Mr Le Maire and his counterpart here Paschal Donohoe failed to agree on how big internet firms should be taxed.
The French finance minister again attacked low taxes paid by big tech firms headquartered in Ireland. Mr Donohoe said the pair agreed to explore potential solutions via talks at OECD level.
