|Author (Corporate)||Cardiff EDC|
|Content Type||News, Overview, Policy-making|
Overview, reports and information relating to a proposal put forward by France's government on a tax affecting the so-called tech giants.
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 the intention 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.
|Subject Tags||Digital Economy|
|Countries / Regions||France|