Tax to hit firms like Facebook and Apple
France has announced it is bringing in a “Gafa [Google, Amazon, Facebook and Apple] tax” on big digital companies by the end of February.
The EU aims to come to an agreement on the subject next month but France says it will not wait. It claims the tax could bring in €500million this year.
The multinational businesses operate in several countries and, via complex structures, can choose where to pay tax.
For example, Google’s turnover in France was estimated at €2billion in 2017 – but it reported only €325million, so paid just €14million in tax.
Apple, Amazon and Facebook also – legally – take advantage of optimisation fiscale (tax optimisation) which allows them to declare some of their advertising income in other countries, such as Ireland or Luxembourg, which have lower tax rates.
Although the European Commission hopes to come up with a deal this year, Economy and Finance Minister Bruno Le Maire said France would be taxing Gafa before that.
Other countries, such as Spain and Italy, have also been reviewing how to tax the Gafa firms.
Britain may also follow France. Chancellor Philip Hammond announced in October that he would introduce a tax of 2% for global digital companies.