France has indicated its determination to commence taxing US technology companies, also known as GAFA, effective from January 1, 2019.
Before now, the country’s Economy Minister, Bruno Le Maire, had said that France would give the EU until March to come up with a deal on the proposed tax regime.
Specifically, early this month France said it would start taxing Google, Apple, Facebook and Amazon, the big US technology companies known as GAFA, if European Union finance ministers failed to agree on a bloc-wide digital tax next year.
Announcing the latest decision of the government today, Le Maire said due to difficulties in finalizing a new EU-wide levy, France would introduce its own tax on the large internet and technology companies from January 1.
A news report sourced from DW.COM quoted Le Maire as saying that he hopes the new tax would raise €500 million ($570 million) in 2019.
The minister told France 2 Television crew that: “I am giving myself until March to reach a deal on a European tax on the digital giants. If the European states do not take their responsibilities on taxing the GAFA, we will do it at a national level in 2019,” he added.
France, supported by Germany, had proposed a comprehensive digital services tax (DST) to cover all 28 EU member states.
But Ireland vetoed the move, arguing that it would exacerbate US-EU trade tensions, urging the said the bloc to wait until the Organisation for Economic Co-operation and Development (OECD) had presented its tax proposals in 2019.
France and Germany then presented an alternative plan at a meeting of EU finance ministers. It proposed slapping a 3 percent tax on digital advertising from Google and Facebook, which together account for about 75 percent of digital advertising, starting in 2021.
Ministers asked the European Commission to work on the new proposal and present its findings to them in January or February.
Le Maire said after the meeting that “it’s a first step in the right direction which in the coming months should make the taxation of digital giants a possibility.”
He explained further: “The digital giants are the ones who have the money. The companies make considerable profits thanks to French consumers, thanks to the French market, and they pay 14 percentage points of tax less than other businesses.”
