French Lower Parliament Passes Big Tech Tax Bill

Digital Tax

France’s lower parliament has passed a proposed tax that targets the revenue of tech giants like Google, Amazon and Facebook.

Last month, France’s finance minister announced the 3 percent tax, which targets digital businesses with €750 million ($845 million USD) in global revenue and €25 million in domestic revenue. The tax will apply to about 30 major companies, mainly from the U.S., and is expected to help France generate $565 million each year.

The proposed tax could also spark the legislation of internet companies in other European countries. In fact, there is speculation that a European Union-wide digital tax may be instituted — though an effort to pass a 3 percent digital tax failed last year, due to objections by Ireland and Germany.

The digital tax proposal, included in Article 1 of the French tax bill, passed with overwhelming approval by the National Assembly, with the agenda for a second round of voting planned for a Senate meeting on April 9. The draft text included an amendment for a domestic double taxation clause, which could prove controversial because it may exclude the only major French tech company, Criteo SA.

“Why has France committed itself for two years in this fight, without targeting any state, any nation in particular, but with an objective of justice and fiscal efficiency? It does so because we are facing an economic revolution to which we have, so far, made no fiscal response,” said Bruno Le Maire, France’s minister of economy and finance, according to Bloomberg.

In addition, Article 2 of the digital tax bill would postpone a planned corporate tax reduction for companies that have more than €250 million in sales. The National Assembly has yet to vote on the article.

Once all provisions in the bill are approved, it will move on to the Senate, France’s upper house.


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