France Moves Forward With 3 Percent Tax on Big Tech Revenue
The French parliament's lower house passes a new tax targeting large tech companies based on their local revenue. The measure applies a 3 percent rate to marketplace and advertising giants that meet specific financial thresholds.
The lower house of the French parliament passes a new tax targeting tech giants without any modifications. The legislation requires companies that generate more than €750 million globally and €25 million in France to pay a 3 percent tax on their French revenue. This tax specifically targets tech companies involved in marketplaces, such as Amazon and Uber, and advertising, such as Facebook and Google.
Unlike traditional corporate taxes, this unusual model taxes revenue instead of profit. French revenue includes all transactions involving a French mailing address or IP address, which requires significant tracking efforts from the tax administration. The French government expects to collect €400 million from this tax in 2019 as it stops waiting for broader European Union action.
Economy Minister Bruno Le Maire continues to push for a unified European approach, but securing a unanimous vote from all EU member states proves difficult because some countries attract regional tech headquarters. France states that it will replace this temporary tax if the OECD or the European Union successfully establishes standardized rules for taxing tech companies. The upper house of the French parliament now prepares to debate and vote on the plan.