French economy minister Bruno Le Maire has presented to the government details on the new digital tax unveiled at the end of 2018, targeting digital sales from the so-called GAFA (Google, Apple, Facebook and Amazon) and large digital companies. The measure aims to introduce a 3 percent tax rate on digital sales linked to targeted advertising, personal data used for marketing purposes, and intermediary services from marketplace platforms. It will apply to companies with annual turnover above EUR 750 million internationally and EUR 25 million in France.
If approved by parliament, the tax will apply for the whole of 2019 and is estimated to generate EUR 500 million annually for the public treasury, according to Le Maire. The minister also told the French press that the number of companies concerned will be in the region of 30, mainly headquartered outside France (US, China, Germany, Spain, and UK, among others).The government described the tax as an interim measure that would remain in place until consensus on new digital tax rules can be found internationally, referring specifically to the OECD initiative announced at the end of January.
Under the proposed legislation, the government also said that companies with annual turnover above EUR 250 million will not benefit from the reduction in the corporate tax rate planned for 2019. The rate will drop from 33 percent to 31 percent for eligible companies during the current year, and is expected to gradually reduce further to 25 percent by 2022.
