France’s tax on tech giants is happening

Is it happening? Is it not happening? After years of back and forth, it looks like the new tax on tech giants in France is about to become a law. Big tech companies that generate significant revenue in France will be taxed on their revenue generated in France.

France’s Economy Minister Bruno Le Maire has been lobbying for a new tax so that tech giants would stop optimizing their European corporate structure to lower their effective tax rate. Originally, Le Maire wanted to convince other European countries to get on board.

But you need a unanimous vote when it comes to tax reforms in Europe. And Le Maire couldn’t convince everyone.

Latest news:  The 11 Best Widgets for Your Android Home Screen

Le Maire still wanted to do something. So here we are, with a new tax on tech companies that generate over €750 million in revenue globally and €25 million in France.

If you’re operating a marketplace (Amazon’s marketplace, Uber, Airbnb…) or an advertising business (Facebook, Google, Criteo…), you will have to pay 3 percent of your French revenue in taxes. The government says that it isn’t against American companies as European and Asian companies are also about to get taxed.

Latest news:  Three imperatives for educators to get more women in tech

It’s a weird taxation model as it is based on revenue and not profit. It’ll also require some work from the taxation administration as French revenue means that it involves all transactions with somebody with a French mailing address or a French IP address. France expects to generate €400 million in revenue with this new tax in 2019.

I’ve been talking about this new tax with people in the French tech ecosystem and they think it’s a publicity stunt more than anything else. The OECD has been working on a way to properly tax tech companies with a standardized set of rules.

Latest news:  Facebook refuses to disclose “chuck Chequers” Brexit advertiser to UK parliament

It could still take a couple of years, but it would be based on profit and it would clarify the situation across dozens of countries. It would replace today’s new tax.

Don’t get me wrong. Taxing tech giants is important and tech companies have been fined for tax avoidance for too many years. But this feels a bit rushed.

Apple has finished paying $15 billion European fine

Amazon settles tax optimization dispute with French authorities

Google Is Preparing To Pay A Huge Fine For Tax Noncompliance In France

Close Menu