On Thursday, French finance minister Bruno Le Maire vowed that France will tax big digital businesses this year whether there is progress or not towards an international deal on a levy, claiming that such a tax had never been more legitimate or more necessary.
Nearly 140 countries from the Organisation for Economic Cooperation and Development (OECD) are negotiating the first major rewriting of tax rules in more than a generation, to take better account of the rise of big tech companies such as Amazon, Facebook, Apple and Google that often book profit in low-tax countries.
“Never has a digital tax been more legitimate and more necessary,” Finance Minister Bruno Le Maire told journalists on a conference call, adding such companies were doing better than most during the coronavirus crisis. “In any case, France will apply as it has always indicated a tax on digital giants in 2020 either in an international form if there is a deal or in a national form if there is no deal.”
France’s national tax has been a source of contention with Washington, which considers that it unfairly targets U.S. digital companies… Frustrated with the lack of global progress because of opposition from the United States where the tech giants are based, some countries like France introduced their own digital tax last year. Italy, Britain and Spain have also either already introduced their own digital taxes or plan to do so. Such moves triggered threats of retaliation via trade tariffs from Washington.
MacDailyNews Take: Last December, the U.S. vowed 100% tariffs on $2.4 billion in imports from France over such a digital tax that would harm U.S. tech firms including Apple.
As per the EU itself, the smart approach for Apple et al. is to lobby for harmonized EU taxation over a state-by-state patchwork of taxes, as that will at least offer simplicity, stability, and predictability.