French minister of economics Bruno Le Maire will be submitting a draft legislation in which major internet companies will be charged with a 3 % turnover tax. He feels the European Union takes too long to reach an agreement.
Le Maire had hinted before that France would eventually be raising its own national 'Google tax' in the absence of a European agreement and now he puts his money where his mouth is: Le Maire will be submitting a bill on Wednesday to raise a 3 % turnover tax on companies such as Facebook and Google.
The new tax would have to be paid by internet corporations with a global turnover of at least 750 million euros (and at least 25 million in France). According to Le Maire, about thirty concerns will be affected and the tax will generate at least 500 million euros. They are mainly American companies, but also Chinese, German, Spanish and British ones – and one French one.
At the European level, there have been ongoing negotiations for some months about raising a tax on digital activities: large internet companies barely pay any taxes in Europe because they are not physically present in those countries. In addition, the tax system has not developed along with the digital revolution. The EU has suggested a compromise: raising a limited tax of 3 % on the digital turnover, but that proposition was blocked by some of the smaller member states. Sweden and Ireland in particular are worried about possible countermeasures by American president Donald Trump. In matters such as these, each EU member state can effectively block a proposition by vetoing it.