France’s Minister of Economy and Finance put forward a bill to tax internet companies such as Google, Amazon, Facebook and Apple.
Bruno Le Maire’s proposal would tax the digital sector's leading companies 3% of their digital turnover made in France from January 1 2019.
The tax specifically targets digital platform companies (that is companies that receive commissions for connecting customers and companies, rather than selling their own products directly) and online advertising – in particular, activities related to advertisement targeting and resale of personal data for advertising purposes.
To be liable for the tax, companies would need a global turnover of over €750 million from digital activities and at least €25 million of that would need to be made in France. The Minister expects the tax to generate annual revenues of up to €500 million by 2020.
Le Maire said the tax would also enable reduction of taxes for French start-ups. Up to 30 companies would be affected – mostly foreign firms.
Le Maire says France wants to develop taxation on data in order to finance tomorrow's public services and create a fairer tax environment in France. He said that digital giants pay 14 tax points less that Europe's small and medium-sized enterprises (SMEs).
He told the Parisien, "The fact that such companies pay less tax in France than a large bakery or a cheese producer in Quercy creates a real problem."
The French government said that "virtuous" companies, which pay taxes in France, will be able to deduct the amount of tax paid from corporate tax.
"This will have the effect of reducing amounts of corporate tax by up to a third for companies who pay their taxes in France", the Minister said.
Le Maire said France wants to inspire other countries to make similar moves.