France will introduce digital tax in the New Year

Dec 20, 2018


By Esmée Hardwick-Slack

France will introduce digital tax in the New Year

Earlier this year it was reported that the European Commission had proposals for a 3% tax on the revenues of large internet companies with global revenues above €5750m (£675m) a year and taxable EU revenue above €50m, this includes Google, Amazon and Facebook.

France and Germany have been pushing for the European Commission to agree measure by the end of the year, however, the proposal has been opposed by countries including Ireland, the Czech Republic, Sweden and Finland. The UK “digital sales tax” is not expected to come into force until 2020, with Philip Hammond announcing in the 2018 Budget that the tax would raise up to £400m for the Treasury.

French Economy Minister Bruno Le Maire has previously said that France would wait until March 2019 before imposing a national tax to allow time for a possible Europe-wide tax. However, in a recent interview, Prime Minister Edouard Philippe said the government will be ready to act sooner. The expected intake would help to offset the cost of measures taken to assuage the recent yellow vest protesters.

At a press conference in Paris, Le Maire said: “The tax will be introduced no matter what on January 1st and it will be for the whole of 2019, for an amount that we estimate at 500 million euros.”

In addition to taxing direct sales, France will also require the companies to pay a levy on advertising revenues, websites and the resale of private data.

Under current EU law, tech firms such as Google and Facebook can choose to report their income in any member state, prompting them to pick low-tax nations like Ireland, the Netherlands or Luxembourg. These firms pay a 9% levy on average, compared to the 23% for other businesses, according to EU competition commissioner, Margrethe Vestager.

Big US tech companies have argued against this, saying that they just are complying with national an EU tax laws.


What are your thoughts on the digital tax? Let us know in the comments or join the conversation on Twitter.


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