France is about to impose a 3% revenue tax on big tech companies

France wants big tech companies to fund its piggy bank.

More bad news is coming from Europe for tech giants. The lower house of the French parliament earlier in the week passed a bill introducing a three percent tax on these companies.

The bill should be approved by the French Senate next week, to then be implemented as a law.

The move is meant to counter the tax avoidance problem persisting for many years, that sees the likes of Google, Facebook, Amazon, and others pick low tax EU member-states to set up shop in Europe – while paying virtually no taxes in those countries where the bulk of their revenue is made.

AP reports the tax will be paid by digital players whose annual revenue exceeds $847 million worldwide, and $22.5 million in France. The country expects to receive some $566 million to its budget in this way – and for the figure to grow rapidly in the future.

According to the agency, the legislation is designed to “primarily” affect those companies whose business model is to collect user data and sell it for online advertising.

Tech giants' reaction to the tax decision? “It could lead to higher costs for consumers,” the article said.

According to earlier reports, France decided to act after seeing no activity on the issue from the EU itself – who would not move to introduce a bloc-wide tax on tech giants.

Paris was also undeterred by the opposition coming from Washington, saying that the law would contribute to bringing efficiency and justice to the system.

But earlier in the year, US Secretary of State Mike Pompeo urged France to abandon the idea, saying it would be negative both for the US companies in question and for EU citizens.

After this was announced by the US State Department, the French foreign ministry reacted with a statement of its own, urging Pompeo to join in France's efforts towards imposing an international digital tax at the level of the Organization for Economic Cooperation and Development (OECD), which would render national taxes unnecessary.

In its report this week, AP said France is still trying to secure a deal that would include OECD's 34 member-states.

Didi Rankovic

Didi Rankovich is an experienced online journalist, editor, and translator, with a career spanning over ten years writing for major a English-language website in Serbia, and previously working as translator for international organizations and peacekeepers in the Balkans. Rankovich is passionate about free and open source tech and is a head contributor for Reclaim The Net, focusing on lead stories. [email protected]
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