France unveils new tax for global internet giants

France is set to unveil legislation yesterday to increase taxes on global internet giants such as Google and Facebook, putting it among a vanguard of countries seeking to force the companies to pay more in the markets where they operate. Under a proposal set to be discussed by cabinet ministers and submitted to parliament, large companies operating in France would face a tax of three percent on their digital sales in the country.

“The amount obtained from this three percent tax on digital gross sales in France from January 1, 2019 should soon reach 500 million euros ($566 million),” Economy Minister Bruno Le Maire told the French daily Le Parisien at the weekend. The new levy is known as the “GAFA tax” in France -- an acronym for US giants Google, Apple, Facebook and Amazon -- who have until now routed their sales in France through subsidiaries in low-tax EU members.

Under the draft legislation set to be presented by Le Maire on Wednesday, only digital companies with global annual sales of more than 750 million euros and sales in France of at least 25 million euros would be taxed. “If these two criteria are not met, the taxes will not be imposed,” Le Maire said. About 30 companies from the US, China, Germany, Spain and Britain as well as France would be affected, he said.