France, which had vowed to start taxing Google, Apple, Facebook, and Amazon in December if the European Union failed to agree on a digital tax, now says the tax will be implemented on January 1.
According to a report in DW.com, France’s Economy Minister Bruno Le Maire said he hoped the tax will result in France raising $570 million in 2019 alone. “I am giving myself until March to reach a deal on a European tax on the digital giants,” Le Maire had told France 2 television, according to DW.com. “If the European states do not take their responsibilities on taxing the GAFA, we will do it at a national level in 2019.”
France and Germany had introduced a digital services tax that would cover all of the EU member states but it was vetoed by Ireland, which said it would cause more trade tensions between the European Union and U.S. Ireland also called on the European Union to wait until it receives a tax proposal from the Organisation for Economic Co-operation and Development (OECD). Following on the heels of that, France and Germany came up with an alternative plan which included a 3 percent tax on digital advertising from Google and Facebook. Finance ministers asked the European Commission to look at the new proposal and provide findings in January or February, noted the report. Le Maire said on France 2 television that it is the digital companies that are the ones with 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,” he said, according to DW.com.
According to European Commission estimates, companies pay taxes of 23 percent of profits — as compared to the between 8 and 9 percent that tech companies pay. The call on the part of France for Internet companies to pay more comes as the government is reeling from widespread protests, which were sparked by a fuel tax increase which the government has decided to get rid of. It is not clear if walking back from that will be enough to quell protests, noted the report.