France doesn’t want to wait for European tax reform to tax tech giants
France's Economy Minister Bruno Le Maire held a press conference earlier today to announce that France will tax big tech companies starting on January 1st, 2019.
This has been a long-rumored tax reform, and it looks like France is changing the scope of the new tax. After a couple of years of negotiations at the European level, France and other European countries have failed to convince everyone that tech companies have been optimizing their tax structure for too long.
The main issue is that a new tax model requires a unanimous vote - every European Union member country needs to vote for the reform. While countries with big local markets were in favor of the move, many smaller countries have yet to support the new tax.
So the French government is trying something new. Le Maire thinks it's better to start taxing tech companies in France now and find European support later.
Le Maire wants to target big tech companies in particular - think Google, Apple, Facebook and Amazon. He thinks the new tax could represent around a500 million for 2019 alone ($565 million).
And it's true that Apple, Amazon and Google have all had issues at some point. They've all been accused of illegal tax benefits and other tax evasion schemes. In many cases, those companies have reported ridiculously low profits in most European countries as they've been wiring all profits to a tax-friendly country.
It's still unclear how the French tax is going to work. But Le Maire says that France will look at advertising revenue, marketplace revenue and revenue based on personal data.
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