Web tax, here’s how France will hit Google, Amazon, Facebook and Apple
Despite the retaliation threatened by the US, France will impose the tax on big tech (web tax) already this year
Paris challenges Washington and goes straight on the web tax.
France will apply the tax on large companies in the digital sector, the so-called web tax, in 2020. This was confirmed by the Ministry of Economy, despite the threats from the United States to apply tariffs on French products worth 1.3 billion dollars .
The French move risks escalating a long-lasting struggle over how to make American tech multinationals pay a larger share of their taxes in the countries in which they operate.
France had collected the tax in 2019, but then suspended it pending the success of international negotiations within the Organization for Economic Cooperation and Development (OECD) on a global taxation of multinationals and Internet profits.
After the failure of the OECD negotiations in October, Paris has therefore decided to go ahead with the levy of the web tax.
All the details.
FRANCE WILL REQUIRE WEB TAX ALREADY IN DECEMBER
France will collect the tax on web giants again this year. This was confirmed by the Ministry of Economy and Finance across the Alps, in the wake of an article in the Financial Times .
Companies subject to the tax have received a tax notice for the payment of the 2020 down payment, sources from the ministry indicated.
HIT GOOGLE, AMAZON, FACEBOOK AND APPLE
According to the FT , Facebook and Amazon are among the groups that have received the notification in the past few days. The novelty will affect the large Internet multinationals, defined in the country with the acronym "Gafa", which stands for Google, Amazon, Facebook and Apple.
THE TAX PROVIDED BY THE FRENCH PARLIAMENT
Under European Union law, American companies can report their profits from across the bloc in a single member state, in most cases in low-tax jurisdictions such as Ireland or the Netherlands.
But in 2019 the French Parliament approved a 3% tax on the turnover of digital giants, accused of tax evasion due to the "transfer" of profits to countries with low or no taxation.
The French web tax applies to companies with revenues from these activities exceeding € 750 million globally and € 25 million in France.
The tax paid 350 million last year to the French public coffers.
LIKE SUMMER WASHINGTON
Washington, which considers the web tax discriminatory as it mainly affects US companies, reacted by threatening to apply customs duties of 100% on some French products, in particular cheeses, cosmetics and handbags.
WHAT HAPPENED BETWEEN MACRON AND TRUMP ON WEB TAX
Last January, at the WEF meetings in Davos, the two countries had decided on a truce. In order to give a chance to multilateral negotiations within the OECD for the adoption of a global tax on multinationals.
Nonetheless, Trump had announced punitive tariffs of 25% on French products worth $ 1.3 billion, including renowned cosmetics and leather goods, should Paris collect the tax.
Furthermore, the United States withdrew from OECD talks in June.
"We had suspended the levy of the tax to allow the negotiation to the OECD, but the negotiation failed, so we will levy the tax on the digital giants next December" had warned the Minister of Economy Bruno Le Maire in mid-October.
THE FAILURE OF NEGOTIATIONS WITHIN THE OECD
In fact, last October, the OECD acknowledged that this year it will not reach an agreement on a new global standard for the taxation of digital businesses as hoped, especially due to the opposition of the United States to the proposals made.
THE LOCATION UK, SPAIN AND ITALY
Without forgetting that last August the finance ministers of the United Kingdom, France, Spain and Italy signed a joint letter demanding that the tech giants "pay their fair share of taxes".
USA MADE DUTIES COMING FOR PARIS?
By confirming the levy, France is thus exposing itself to sanctions by the United States, while the transition of powers between the new president Joe Biden and his predecessor Donald Trump is underway. The latter had already increased customs duties on French wines by 25% as part of the retaliation on the dispute over state aid to Boeing and Airbus.
According to MarketWatch , "the clear hope of European governments is that the United States will join the OECD talks again, so that an international agreement on global taxation can be reached next year".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/web-tax-ecco-come-la-francia-colpira-google-amazon-facebook-e-apple/ on Wed, 25 Nov 2020 08:33:47 +0000.