Google, Amazon tax shows need for EU majority vote, France says

Register now

The European Union’s inability to agree on taxing Internet giants like Google and Amazon shows the need for majority voting at the soon-to-be 27-member bloc, French Finance Minister Bruno Le Maire said.

“Finland, Denmark, Ireland and Sweden shouldn’t be allowed to block 23 countries from imposing a tax that they think is needed and just,” Le Maire said at a press conference in Paris as he presented a French tax that would apply to about 30 Internet giants like Facebook Inc. and could raise 450 million euros ($509 million) in its first year.

France’s tax, which Le Maire called, “simple, targeted, and efficient,” is a temporary measure while the EU and The Organisation for Economic Cooperation and Development seek agreement on how to better tax Internet companies that play off tax rules by booking revenue in countries that aren’t necessarily where they actually make their money.

“These giants have created much value and they have created many jobs, and I will never denounce their success,” Le Maire said. “But we must fight against the distortions that these giants have created, especially on tax optimizations and on the dominant positions many have created. We must create taxation for the 21st century.”

The bill including the tax will be approved at today’s cabinet meeting and then presented to parliament in early April.

Tax Details

Le Maire said 23 of the EU’s 28 members favor some sort of Internet tax, though the tax that Germany has agreed to support has a narrower base than that being unilaterally rolled out in France.

The levy of 3 percent of French sales starts retroactively from Jan. 1 and potentially could raise 650 million euros annually by 2022. The tax applies to any Internet company with global revenue above 750 million euros and French sales above 25 million euros, and covers locally targeted advertising, data sales, and marketplace.

The tax excludes direct sales of goods and services, messaging and payment platforms, and financial services. Le Maire gave the example of Inc., which wouldn’t be taxed on its direct sales but would be taxed for linking outside vendors with clients.

Bloomberg News
International taxes Corporate taxes Tax avoidance Google Amazon