France is set to impose a new law to tax big tech companies that will raise as much as 500 million euros starting on Jan. 1, 2019.
It won't wait for the rest of the European Union members' nod.
France To Tax Tech Giants
In a press conference on Tuesday, DecBruno Le Maire, French Finance minister, mentioned the companies involved including Apple, Google, Facebook, and Amazon.
Both France and Germany are pushing for a 3% tax on big tech companies' online revenues earned within the whole EU region. Part of the move is to prevent large companies like Apple from keeping their profits in countries with low tax rates.
The proposed law requires a unanimous vote among all 28 European Union member countries. However, member countries with big local markets support the move while many smaller countries are opposing it including Ireland where Google and Apple's headquarters are based.
On the other hand, a group of major world economies called Organisation for Economic Co-operation and Development or OECD has been working on international taxation scheme that would regulate the taxation on tech firms.
France and Germany attempted to save the deal by limiting the tax imposition on ad sales from tech giants such as Google and Facebook, which will exclude companies like Airbnb and Spotify.
For now, France is implementing its own tax on Google, Apple, Facebook, and Amazon, which are collectively known in the EU region as GAFA.
"The tax will be introduced whatever happens on 1 January and it will be for the whole of 2019 for an amount that we estimate at €500m," Le Maire said at a press conference in Paris.
Other Countries To Follow Suit
Other countries in the EU including the UK are also pushing to impose their own taxes to tech giants. For UK Treasury Minister Mel Stride, UK would prefer a broader imposition of the European Union. If the group would not be able to make a collective decision, it would not prevent them from doing a unilateral decision to tax the tech giants.
Chancellor Philip Hammond promised to initiate a digital sales tax in his October budget. According to Hammond, this will ensure that these global companies generating high profits in the UK pay their fair share.
Spain and Italy are also working on their own versions of taxing online companies as well as Singapore and India.
