NEW A vastly improved search engine helps you find the latest on companies, business leaders, and news more easily.<doc-sep>France will introduce a bill Wednesday to tax internet and technology giants on their digital sales, and thus curb efforts to pay global levies in countries with lower tax rates. Advertising Read more The bill, to be discussed by cabinet ministers before being submitted to parliament, is a proposal by Economy Minister Bruno Le Maire to have companies pay a tax of three percent on much of their digital sales in France. The government hopes the move will catch on abroad despite an earlier failure to reach consensus at the European Union level. Paris says it is seeking "common ground" on the issue with fellow members of the Organisation for Economic Cooperation and Development (OECD) in a bid to for a worldwide agreement later this year. "The amount obtained from this three percent tax on digital gross sales in France from January 1, 2019 should soon reach 500 million euros ($566 million)," Le Maire told the French daily Le Parisien. The so-called GAFA tax has a French acronym that indicates it was inspired by US giants such as Google, Apple, Facebook and Amazon, and targets digital companies with global annual sales of more than 750 million euros ($849 million) and sales in France of at least 25 million euros. "If these two criteria are not met, the taxes will not be imposed," Le Maire said. The three percent levy is to come on top of taxes already owed by the companies concerned. The new tax will cover areas such as advertising, websites and the resale of private data, Le Maire said. About 30 companies from the US, China, Germany, Spain and Britain would be affected, Le Maire said. "There will also be a French firm and other originally French firms that were later bought by big foreign companies," the minister added. For Le Maire, taxing GAFAs "is a question of fiscal justice" as "digital giants pay 14 percent less tax than small- and medium-sized European companies". He emphasised that "as soon as the OECD agrees on new international tax rules, these will replace our French tax." Low-tax nations Under EU law, Internet giants can choose to report their income in any member state, prompting them to choose low-tax nations such as Ireland, the Netherlands or Luxembourg. The low tax rates have aroused anger in many European countries, but the 28-member bloc is divided on how to resolve the issue. Ireland, which hosts the European headquarters of several US tech giants, leads a small group of otherwise mostly Nordic countries that argue that a new tax could lead to reprisals against European companies in the United States. But Paris argues the measure would be a vote-winning accomplishment for mainstream EU politicians before European parliamentary elections in May, in which anti-Brussels populists could do well. Germany is concerned that agreeing to the tax could affect auto exports to the United States. Policymakers worldwide have struggled over how to tax internet giants that dominate their sectors but who often report sales and profits in low-tax jurisdictions to reduce their tax bills. Britain, Spain and Italy are also working on national versions of a digital tax, while Japan, Singapore and India are planning schemes of their own. The head of Google France, Sebastien Missoffe, has said his firm is ready to pay a new tax, but pointed to difficulties in assessing, for example, how much any one country might receive from worldwide advertising. A spokesman for Facebook told AFP that, as of last year, all advertising revenues generated from French clients were now registered as French income. The French bill is being presented as the government seeks ways of paying for financial relief measures to ease the "yellow vest" protests that have roiled the country for three months. But for Raphael Pradeau from the anti-capitalist Attac lobby, the proposed tax is "symbolic and does not solve the problem of massive fiscal evasion." "It's as if we accept that such firms can practice tax evasion in return for a few crumbs," he said. (AFP) Daily newsletterReceive essential international news every morning Subscribe<doc-sep>The French government on Wednesday introduced a tax aimed at internet giants like Google, Amazon and Facebook, forging ahead with stricter regulation on big tech without broad-based support from the European Union. The 3 percent tax will apply to the French revenues of roughly 30 major companies, mostly from the U.S. France's Finance Minister Bruno Le Maire estimated the tax will raise roughly 500 million euros ($565 million) per year. The French tax alone would represent just a sliver of the revenues of American tech giants. But it could pave the way for further regulation of U.S. tech companies in Europe, including an EU-wide digital tax. An EU-backed effort to pass a 3 percent tax on the revenues of big internet companies failed last year amid concerns from countries including Ireland and Germany, who feared retaliation from the U.S. The Organization for Economic Cooperation and Development (OECD) is currently examining a global digital tax but has said it won't come to a conclusion until 2020. France's Le Maire has been an outspoken proponent of a digital tax, arguing Google, Amazon and Facebook benefit from lower tax rates than European companies. The French minister has said France would withdraw its own tax once the OECD reaches an agreement.<doc-sep>The French government on Wednesday introduced a new levy aimed at big tech giants, adding to the momentum behind more than a dozen similar measures globally that could collectively cost Silicon Valley companies billions of dollars. The measure, likely the first in a wave of proposed digital-services taxes to be applied in Europe, will apply a 3% tax on French-sourced revenue that companies like Alphabet’s Google or Amazon.com reap from specific services like targeted advertising or running a digital marketplace. The new French tax will intensify pressure on the U.S. in a new round of multilateral talks, shepherded by the Organization for Economic Cooperation and Development, about how to overhaul the corporate taxation system for the digital age. France and other European countries want a system that allocates more of Silicon Valley’s profits to their territories for taxation. OCASIO-CORTEZ NOT RULING OUT AMAZON'S RETURN TO NEW YORK, SAYS COMMUNITIES MUST BE CONSULTED In part to head off the threat of a patchwork of unilateral taxes like this one, the U.S. is now offering its own compromise about how to do so—though it opposes measures that target digital companies in particular and suggests focusing on overseas marketing spending. The French tax will apply retroactively to the beginning of 2019, making it one of the first such taxes to go on the books anywhere in the world. French officials say they expect it to bring in €400 million in 2019, rising to €650 million by 2022. French President Emmanuel Macron’s party controls a large majority in parliament, which makes the measure likely to pass when it comes up for debate in April. “These giants use your personal data and make a significant profit from it, without paying their fair share of tax,” Finance Minister Bruno Le Maire said. Google and Facebook each said they pay all the taxes they owe in every country where they operate. A Google spokeswoman said the company pays the “vast majority of its corporate income tax” in the U.S., while a Facebook spokesman said the company backs the OECD talks and pointed to a change it made in 2017 to collect some revenue from its ads in countries where it operates. Amazon declined to comment and Apple didn’t immediately have any comment, but both companies have in the past said they pay all the tax they owe. Click here for more from The Wall Street Journal, where this story was first published.<doc-sep>
The French government on Wednesday unveiled plans to slap a 3 percent tax on the French revenues of internet giants like Google, Amazon and Facebook. The bill is an attempt to get around tax avoidance measures by multinationals, which pay most of their taxes in the EU country they are based in — often at very low rates. That effectively means the companies pay next to no tax in countries where they have large operations. The tax will apply to digital companies that have global revenues of over 750 million euros ($848 million), and French revenue over 25 million euros. That will help protect startups, Finance Minister Bruno Le Maire said in a news conference. About 30 companies, mostly based from the U.S, but also from China and Europe, will be affected. France is set to be the first European country to implement such a tax as the bill presented Wednesday in a cabinet meeting is likely to pass in the coming months in parliament, where French President Emmanuel Macron's party has a majority. Le Maire estimated the tax will raise about 500 million euros ($566 million) a year this year but that should increase "quickly." He said the tax will not affect companies directly selling their own products online. It will mostly affect companies that use consumers' data to sell online advertising. It will also apply to online services companies like Airbnb and Uber. "This is about justice," Le Maire said. "These digital giants use our personal data, make huge profits out of these data ... then transfer the money somewhere else without paying their fair amount of taxes." Le Maire quoted figures from the European Commission, the EU executive body, showing that the major digital tech companies pay on average 14 percentage points less tax than other European companies. France decided to implement the digital tax after a similar proposal at the European Union level failed to get unanimous support from member states. Le Maire said he would now push for an international deal by the end of the year among the countries of the Organization for Economic Cooperation and Development, a Paris-based forum made up mostly of developed nations. The Computer and Communications Industry Association criticized the French measure, saying it would ultimately lead to higher costs for French firms and consumers. "So-called digital companies are, contrary to claims, not under-taxed and they should not be arbitrarily targeted," said CCIA Europe's vice president, Christian Borggreen.