“Google Inc., Apple Inc. and other Internet-linked companies may soon feel the long arm of the French taxman,” Helene Fouquet and Marie Mawad report for Bloomberg. “In what may be Europe’s first such effort, President Francois Hollande’s government says it will look into changing laws next year that will block the ability of online companies to pay levies on French earnings in European countries with lower tax rates. The government is also weighing options for common European value-added taxes.”

“Taxing the digital sector like other industries could generate more than 500 million euros ($648 million) for the French state annually, enabling it to narrow its budget deficit, said Philippe Marini, a senator who heads the Senate Finance Committee. Countries across Europe, struggling to bolster government receipts to close budget gaps, are seeking to gather more taxes from companies that hitherto escaped close scrutiny,” Fouquet and Mawad report. “Google, Apple, Amazon and Facebook Inc. collectively pay 100 times less tax than the 500 to 600 million euros they should yearly in France, Benoit Tabaka, former secretary-general of France’s Digital Council, told the Senate Economic Commission in January. He said the four companies collectively pay about 4 million euros in French corporate taxes on online revenue of between 2.2 billion euros and 2.5 billion euros. The companies didn’t confirm the numbers. Tabaka left the Council in June to become a policy manager at Google in Paris.”

Fouquet and Mawad report, “French officials say Google, Amazon, Apple and Facebook are able to sell to French consumers while not paying the 19.6 percent French VAT. Instead, they pay lower rates in Luxembourg or Ireland, where their EU headquarters are… A Paris-based representative for Apple, which has its European headquarters in Cork, Ireland, declined to comment on its French taxes and revenue. The company sells most of the applications for its products through its online App Store… The debate has become more heated under Hollande as the Socialist president, elected in May, seeks to reconcile stalled economic growth with a promise to cut the budget deficit to 3 percent of gross domestic product next year. Hollande’s 2013 blueprint relies on 20 billion euros in increased tax receipts. Budgetary pressure increased after the European Commission, the EU’s executive arm, said on Nov. 7 that it’s afraid France won’t meet its 2013 target, forecasting a 3.5 percent deficit.”

Read more in the full article here.

[Thanks to MacDailyNews readers too numerous to mention individually for the heads up.]

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