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TEHRAN, Mar 07 -The French government has introduced a tax bill for digital giant companies like Apple, Google, Amazon, and Facebook, obliging them to pay a three-percent tax to France.
TEHRAN, Young Journalists Club (YJC) -The tax bill was introduced by French Finance Minister Bruno Le Maire during the meeting of the Council of Ministers on Wednesday.
Under the European Union’s law, internet giants can choose to report their income in any member state, prompting them to choose low-tax nations such as Ireland, the Netherlands or Luxembourg.
But Le Maire said that “nobody can accept that the biggest tech and digital companies in the world pay 14 tax points less than other companies in Europe and elsewhere.”
With the introduction of this new tax, the French government aimed to “invent the tax system of the 21st century,” he said.
According to Le Maire, about 30 companies, mostly from the US, will be liable and the amount raised from such a tax on sales from January 1, 2019, should soon reach 500 million euros.
Only companies that have a turnover of 750 million euros globally and €25 million in France will be liable for the tax, he said, adding that the economy ministry does not want to stifle the growth of French start-ups or create problems for SMEs embracing digitalization.
The new tax bill seems to be mainly targeting giant tech firms based in Silicon Valley, California. The French tax alone would represent just a sliver of the revenues of American tech giants, but it could pave the way for further regulation of US tech companies in Europe, including an EU-wide digital tax.
An EU-backed effort to pass a 3 percent tax on the revenues of big internet companies failed last year amid concerns from countries including Ireland and Germany, who feared retaliation from the US.
Back in June 2018, the administration of US President Donald Trump imposed 10 percent tariffs on aluminum imports and 25 percent tariffs on steel imports, which mainly affects the EU, Canada, and Mexico, ending exemptions that had been in place since March.
Trump argued at the time that enormous flows of imports to the US were putting in jeopardy the American national security, and made an odd departure from a decades-long US-led move towards open and free trade.
In reaction to the US threat to impose more tariffs, the French finance minister said in July that the United States should expect "united and strong" retaliation from European countries.
"If tomorrow there is an increase in tariffs, like in the car industry, our reaction should be united and strong to show that Europe is a united and sovereign power," Le Maire said in an address to an economic conference on July 8, 2018.
Last month, the US Commerce Department sent a report to President Trump that could impose steep tariffs on imported automobiles and car parts, provoking a sharp backlash from the auto industry and the European Union.
The US and EU have also been at loggerheads on setting an agenda for trade talks, leading to speculation that a frustrated US president might move ahead on previous threats to impose tariffs of up to 25 percent on European auto imports.
France’s recent bill to tax major US firms comes as the French government is under pressure, from the Yellow Vest movement and others, to spread the tax burden more fairly.
President Macron had hoped to persuade his European partners to introduce an EU-wide tax on global tech and internet groups
However Ireland, Denmark and Sweden blocked the idea, fearing an impact on inward investment, while Germany worried about possible US retaliation against its car industry.
So the French government has gone ahead with its own legislation while hoping an agreement might be reached globally by 2020.
The legislation is known as the GAFA tax, after the name used in France to denote companies like Google, Apple, Facebook and Amazon.
Source: presstv
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