France’s Finance Minister has said the country will tax digital giants after Coronavirus fallout leaves him focused on saving economy.
FRENCH Finance Minister, Bruno Le Maire, announced that France is set to tax big digital businesses this year whether there is progress or not towards an international deal on a levy.
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.
In January, Paris offered to suspend its digital tax on tech companies’ income in France until the end of the year while any international deal was negotiated.
However, the fallout from the coronavirus outbreak has left finance ministries most focused on saving their economies, potentially jeopardising the end of the year deadline.
France’s national tax has been a source of contention with Washington, which considers that it unfairly targets US digital companies.
Europe has long pushed to make hugely profitable large tech companies doing business over the internet pay tax where they sell their services, rather than in tax havens deliberately chosen under what is called ‘aggressive tax optimisation.’
EU politicians, seeking funds to prevent climate change and diminish wealth differences across the 27-nation bloc, want to see a company like Google, with an annual global revenue of more than $160 billion, pay more tax in the European countries where it makes money.
The urgency for a solution is increased by the Covid-19 pandemic, which triggered lockdowns around the globe and a shift to working from home. This is likely to boost the revenues of internet giants but also makes EU governments even more in need of cash to restart their economies.