French tax on internet giants could yield €500m a year
Finance minister says the 3% tax will target about 30 companies
Paris — A 3% tax on the French revenue of large internet companies could yield €500m a year, French finance minister Bruno le Maire says.
He told Le Parisien newspaper the tax is aimed at companies with worldwide digital revenue of at least €750m and French revenue of more than €25m.
The tax would target about 30 companies, mostly American, 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, he said.
The paper listed Google, Amazon, Facebook and Apple (the four so-called GAFA companies) but also Uber, Airbnb, Booking and French online advertising specialist Criteo as targets.
“A taxation system for the 21st century has to be built on what has value today, and that is data,” 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 small-and-medium sized companies.
Fairer taxes are a key demand of the “yellow-vest” protests seen across France in the past three months.
Le Maire said the tax would target platform companies that earn a commission on putting companies in touch with customers. Companies selling their products on their own websites would not be targeted, such as French retailer Darty, which sells TVs and washing machines via its website.
But companies such as Amazon earning money as a digital intermediary between a producer and a client would have to pay. The tax would also target the sales of personal data for advertising purposes.
In order to avoid penalising companies who already pay taxes in France, the amount paid will be deductible from pretax income, Le Maire said. He will present a draft law to the cabinet on Wednesday before it is presented to parliament.
France has led a push for firms with significant digital revenue in the EU to pay more tax at source, but has made little headway as Germany is cool to the idea, while member states with low corporate tax rates such as Luxembourg and Ireland firmly oppose the proposal.
In an interview with weekly Journal du Dimanche, Carrefour CEO Alexandre Bompard said it is high time to end the financial imbalance between brick-and-mortar firms like his and the US and Chinese internet platform companies.
“They pour their products on to markets without even paying value-added tax, and hardly any other tax at all, it is intolerable. On the same turnover they should pay the same tax,” he said. Reuters