France pushes forward alone with new tax on big tech companies

Tax will come into effect from 1 January, but plans for an EU-wide levy have faltered

France is to press ahead alone with a new tax on big technology companies after struggling to secure agreement for a EU-wide levy.

The French finance minister, Bruno Le Maire, said he believed the tax, which will take effect from 1 January, would raise €500m (£450m) in its first year.

France has been pushing for a EU GAFA tax – named after Google, Apple, Facebook, Amazon – but faced opposition from countries including Ireland, which hosts the European headquarters of several technology companies, including Google and Apple.

The Organisation for Economic Co-operation and Development (OECD), a group of major world economies, has been working on proposals for an international scheme that would regulate taxation on technology companies.

France has also been working with Germany on plans for a 3% tax on EU advertising sales that would begin in 2021.

The plans are a response to the often complex corporate structures set up by several companies that derive huge revenues from major European economies but allow them slash their tax bills by shifting profits to low-tax jurisdictions.

Progress on both the OECD and the Franco-German proposals has been slow, prompting France to move ahead unilaterally.

“The tax will be introduced whatever happens on 1 January and it will be for the whole of 2019 for an amount that we estimate at €500m,” Le Maire told a press conference in Paris.

Several countries, including the UK, have said they are also minded to impose new taxes on technology companies, aware of public frustration at their often meagre contribution to economies from which they make money.

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The chancellor, Philip Hammond, promised to introduce a digital sales tax in his budget in October to ensure that “global giants with profitable businesses in the UK pay their fair share”.

He said the UK could no longer wait for “painfully slow” discussions at international level and would instead introduce a 2% tax on certain types of sales, which he claimed would raise £400m a year.

Spain and Italy are also working on national versions of a digital tax, as are Singapore and India.

Contributor

Rob Davies

The GuardianTramp

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