France moves to impose 3% digital tax

France is set to introduce a digital tax of between 3% and 5% on the French revenue of large internet companies, which could see some 30 tech giants paying around €500m (£429m) annually, if planned legislation is passed

French finance minister Bruno Le Maire told local media at the weekend that the tax would apply to companies with worldwide digital revenue of at least €750m and French revenue of more than €25m. To avoid penalising companies who already pay taxes in France, the amount paid in digital tax would be deductible from pretax income.

The tax would apply to commissions that internet platforms charge on sales made through them as intermediaries, and to revenue from targeted advertising and the sale of user data but would not apply to direct online sales to consumers.

The move would potentially increase the tax bill for Google, Amazon, Facebook, Apple and Uber, Airbnb and Booking.com, among others.

In an interview with Le Parisien, Le Maire said: ‘A taxation system for the 21st century has to be built on what has value today, and that is data.’

He noted that the big tech companies paid 14 percentage points less tax than European small and medium sized companies, saying: ‘They pour their products onto 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.’

Le Maire is to provide a draft law to the French cabinet on Wednesday before it is presented to parliament.

In the autumn of last year, the European Commission published proposals for a 3% tax on the revenues of large internet companies with global revenues above €750m) a year and taxable EU revenue above €50m. The plans have attracted considerable controversy, and have been opposed by member states including Ireland, but France has been a strong supporter of the move.

Report by Pat Sweet

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