French digital tax 'could bring in €500m each year'

French digital tax 'could bring in €500m each year'

French digital tax 'could bring in €500m each year'

A 3 per cent tax on the French revenue of large internet companies could yield €500 million per year, the country's finance minister has said.

The levy of as much as 5 per cent of French sales will start January 1 and potentially raise about 500 million euros ($570 million) for the state, Le Maire told Le Parisien newspaper. Any company with global revenue of more than $853millon and French sales above $28 million would be taxed 3 percent of revenue.

The legislation is expected to be presented to the cabinet this week before it goes before parliament.

The Organisation for Economic Co-operation & Development could eventually draw up a political accord on digital and data taxation, Le Maire said.

According to Le Maire, the tax is planned keeping fiscal justice in view - European SMEs pay some 14 percentage points more tax than digital giants.

"They pour their products onto markets without even paying value-added tax, and hardly any other tax at all, it is intolerable. On the same turnover they should pay the same tax", he said.

Le Maire said the tax would target platform companies that earn a commission on putting companies in touch with customers. To avoid penalising companies who already pay taxes in France, the amount paid in digital tax would be deductible from pretax income.

They include Uber, Airbnb, Booking and French online advertising specialist Criteo as targets.

Le Parisienne's report comes after Mr Le Maire last week said some 127 countries and territories agreed in January to tackle some of the most disputed issues of global taxation, such as where digital companies' cross-border income should be taxed. Fairer taxes are also a key demand of the "yellow vest" protests seen across France in the past three months.

Elsewhere, Spain and the Britain also considering digital sales taxes, Bloomberg reported. "For all these big digital companies, European consumers are decisive".

Mr Le Maire said that for the first time both the U.S. and Ireland had expressed support for an OECD deal on taxation of digital companies in talks with his counterparts from the two countries in the past two days, reported Reuters. "This is the case with the United States".

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