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France to push ahead with tax on tech giants

Written by Hannah McGrath
19/12/2018

France’s finance minister has said he expects a new tax on major tech companies such as Google and Apple to raise an estimated €500 million a year.

Bruno Le Maire said that the French government would plough on with attempts to impose a levy on companies such as Amazon, Facebook and Apple unilaterally, after attempts to agree EU-wide legislation broke down earlier this month, according to AFP.

The EU’s so-called ‘GAFA’ tax - named after Google, Apple, Facebook and Amazon - has been brought to the fore after the companies’ filings showed them paying nominal amounts of tax on revenue made on sales in EU counties.

France has also been working with Germany on plans for a three per cent tax on EU advertising sales that would begin in 2021.

Le Maire said the levy should come into operation in the new year, explaining: “The tax will be introduced whatever happens on 1 January, and it will be for the whole of 2019 for an amount that we estimate at €500 million a year.”

EU countries had hoped to agree a uniform level of taxation on the operations of major tech firms, however talks broke down after Ireland, which hosts a number of US tech giants, raised objections.

France is focussed on pushing ahead with a tax to ensure to guard against companies basing themselves in tax havens to avoid paying levies on their profits in EU countries.

The US has stepped in to defend tech giants such as Microsoft and Apple from lobbying efforts led by France, with president Donald Trump tweeting his displeasure at a fine of $5bn imposed on Google in July.

“The European Union just slapped a $5bn dollar fine on one of our great companies, Google. They truly have taken advantage of the US, but not for long!” he wrote.

The Organisation for Economic Co-operation and Development (OECD) has been drawing up plans for an international scheme to tax technology companies, while the UK chancellor Philip Hammond used his Autumn budget to announce plans for a two per cent tax on revenues, amounting to £400 million per year for Treasury coffers.