Adoption of taxation over big digital companies in France

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Author (Corporate)
Publication Date 2018-
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Summary:

Overview, reports and information relating to a proposal put forward by France's government on a tax affecting the so-called tech giants.

Further information:

In December 2018, the government announced the creation of a new levy on big technology companies (also known as GAFA tax), which includes a 3% tax collected on sales generated in the country by those firms. This tax would affect tech companies with global sales of over €750 million, and which make more than €25 million a year in France. Around 30 companies were seen as the target of this new tax initiative, most of them originally from the United States (US).

These plans were seen as a response to the complex corporate structures set up by several companies that derive revenues from economies across Europ but allow them slash their tax bills by shifting profits to low-tax jurisdictions. Multilateral work on digitial taxation was ongoing - through discussions on OECD level - but no agreement had been reached before France decided to put forward its own national initiative unilaterally. Likewise, consensus had not been found within the European Union to implement a similar initiative on a EU level. However, a number of countries showed intentions to emulate the initiative adopted by the French authorities on digital taxation.

The proposed digital tax was discussed and voted by the houses of the Parliament in the first half of 2019, with the final endorsement held on 11 July. As a reaction to the adoption of the new levy, authorities in the United States formally decided to conduct an investigation on whether this constitutes unfair trade practice that targets U.S. tech giants.

Related Link(s)
Commentary and Analysis
France24, 11/07/2019: What is France's digital tax? https://www.france24.com/en/20190711-what-france-digital-gafa-tax-technology-companies-google-apple-facebook-amazon
BBC News, 11/07/2019: France tech tax: What's being done to make internet giants pay more? https://www.bbc.co.uk/news/business-48928782
The Economist, 11/07/2019: France’s digital tax riles the White House https://www.economist.com/finance-and-economics/2019/07/11/frances-digital-tax-riles-the-white-house

News
BBC News, 17/12/2018: France to introduce digital tax in new year https://www.bbc.co.uk/news/business-46591576
The Guardian, 17/12/2018: France pushes forward alone with new tax on big tech companies https://www.theguardian.com/technology/2018/dec/17/france-alone-new-tax-big-tech-companies-gafa
France24, 17/12/2018: France to introduce tax on large internet, tech firms https://www.france24.com/en/20181217-france-tax-large-internet-tech-gafa-company-usa
EurActiv, 18/12/2018: France to go it alone on digital tax plans https://www.euractiv.com/section/digital/news/france-to-go-it-alone-on-digital-tax-plans/
South EU Summit, 08/01/2019: France Launches Tech Tax On January 1st, Urging The EU To Agree On A Common Digital Services Tax https://www.southeusummit.com/europe/france/france-launches-tech-tax-on-january-1st-urging-the-eu-to-agree-on-a-common-digital-services-tax/
The Local (France), 20/01/2019: France nears implementation of digital tax https://www.thelocal.fr/20190120/france-nears-implementation-of-digital-tax
Deutsche Welle, 03/03/2019: France to set new €500 million digital tax for 30 tech giants https://p.dw.com/p/3EOJO
The Local (France), 06/03/2019: France unveils landmark tax on internet giants https://www.thelocal.fr/20190306/france-set-to-introduce-new-tax-on-internet-giants
The Irish Times, 06/03/2019: France poised to impose 3% digital tax on internet giants https://www.irishtimes.com/business/economy/france-poised-to-impose-3-digital-tax-on-internet-giants-1.3816671
Euronews, 06/03/2019: France unveils plans for its GAFA tax, a new taxation on digital companies https://www.euronews.com/2019/03/06/france-unveils-plans-for-its-gafa-tax-a-new-taxation-on-digital-companies
France24, 06/03/2019: France to target online tech giants with digital tax https://www.france24.com/en/20190306-france-tax-gafa-internet-technology-giants-digital
EurActiv, 06/03/2019: France set to introduce new tax on internet giants https://www.euractiv.com/section/digital/news/france-set-to-introduce-new-tax-on-internet-giants/
France24, 09/04/2019: French lawmakers back tax on tech giants https://www.france24.com/en/20190409-france-lawmakers-back-gafa-digital-tax-tech-giants
Reuters, 10/07/2019: U.S. to probe French plan to tax tech companies https://uk.reuters.com/article/idUKKCN1U52HX
Deutsche Welle, 10/07/2019: US begins investigation of France's planned tax on tech giants https://p.dw.com/p/3LsgC
Reuters, 11/07/2019: Let's not resolve digital tax dispute through threats, France tells Trump https://uk.reuters.com/article/idUKKCN1U613L
The Guardian, 11/07/2019: France hits back at US over tax on digital giants https://www.theguardian.com/world/2019/jul/11/france-us-tax-big-digital-companies-donald-trump-amazon-facebook
BBC News, 11/07/2019: France passes tax on tech giants despite US threats https://www.bbc.co.uk/news/world-europe-48947922
Politico, 11/07/2019: US launches unfair trade practices probe of French tech tax https://www.politico.eu/article/us-launches-unfair-trade-practices-probe-of-french-tech-tax/
France24, 11/07/2019: US launches investigation into French tax on tech giants like Facebook, Apple, Google https://www.france24.com/en/20190711-us-launches-investigation-france-plan-tax-tech-companies
Euronews, 11/07/2019: France passes law to tax tech companies, despite US investigation https://www.euronews.com/2019/07/11/us-to-investigate-france-s-planned-tax-on-tech-companies
BBC News, 11/07/2019: US launches inquiry into French plan to tax tech giants https://www.bbc.co.uk/news/world-europe-48945828
Politico, 11/07/2019: Paris responds to US probe threat as French tech tax passes final hurdle https://www.politico.eu/article/france-responds-us-probe-threat-as-tech-tax-passes-final-senate-hurdle/
Bloomberg, 11/07/2019: France to Tax Facebook, Google In Spite of U.S. Trade Threat https://www.bloomberg.com/news/articles/2019-07-11/france-says-u-s-shouldn-t-use-trade-tools-against-digital-tax
Reuters, 11/07/2019: French Senate approves tax as U.S. opens digital levy probe https://www.reuters.com/article/idUSKCN1U60UQ
EurActiv, 11/07/2019: Trump orders French digital tax probe, amid talk of retaliatory tariffs https://www.euractiv.com/section/digital/news/trump-orders-french-digital-tax-probe-amid-talk-of-retaliatory-tariffs/
Deutsche Welle, 11/07/2019: France passes law taxing internet giants https://p.dw.com/p/3LuK6

Official
French Senate: Création d'une taxe sur les services numériques http://www.senat.fr/dossier-legislatif/pjl18-452.html
French Government: Actualité, 11/07/2019: Taxe GAFA: un premier pas français avant un accord international https://www.gouvernement.fr/taxe-gafa-un-premier-pas-francais-avant-un-accord-international

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