France will tax big digital companies this year, regardless of whether an international agreement is reached on the issue, which means that Internet giants such as Google, Amazon and Facebook will be “knifed” again, the french finance minister said Thursday. “It is legal and necessary to impose a digital tax now,” French Finance Minister Bruno Le Maire told reporters on a conference call. During the coronavirus crisis, such companies performed better than most. “
Bruno Le Maire Infographic
France will impose a “digital tax” of 3 per cent on internet companies with global revenues of more than 750m euros (about 655m pounds) or more than 25m euros (21m pounds) in French revenues.
International negotiations fear difficulties
Nearly 140 countries are negotiating major international tax reforms to better respond to the new environment created by the rise of large technology companies.
However, the outbreak has made the financial sector more focused on saving the economy than on overhauling outdated tax rules, making it increasingly difficult to achieve the goal of completing negotiations by the end of the year.
“In any case, France will start imposing a digital tax this year, and if an international agreement is reached, it will be taxed on the digital giants under international rules and, if there is no agreement, on a national basis,” Le Maire said. “
France’s move has sparked a row with the United States, which says it unfairly targets U.S. digital companies.
France is not alone in the digital tax dispute, which has severed relations between the US and Europe. On April 1this year, the UK government confirmed a digital tax on businesses with global sales of more than half a billion pounds and at least 25 million pounds coming from UK users at a rate of 2 per cent.
HM Revenue and Customs (HMRC) estimates that the digital tax could generate additional annual revenues of up to 515 million pounds ($665 million) by the end of the 2025 financial year.