EU to agree digital tax bill by March, says French finance minister

After months of debates, the European Union is finally edging closer to agreeing on a deal for the new global digital tax bill.

If passed, the new bill will impose a Europe-wide tax on digital services that pay minimal tax in Europe due to the bill’s current loopholes.

The European Commission proposed a 3% levy on tech firms with a global annual turnover of €750m (£653m/$851m) and annual EU revenue of at least €50m (£43m/$56m) – but those in opposition argued that it will unfairly punish companies in the EU.

Compromises were proposed in the face of such opposition, but the European Union failed to reach a deal on a tax on digital revenues.

However, in an interview with Journal du Dimanche newspaper on Sunday (Jan.20th), the French finance minister, Bruno Le Maire, said that progress has been towards the adoption of a new digital tax bill.

Agreement in March

“We made a compromise offer to Germany in December and I am convinced that a deal is within arm’s reach between now and the end of March. With the European elections just a few months away, our citizens would find it incomprehensible if we gave up on this,” Le Maire told the Journal du Dimanche newspaper.

The EU levy was only intended to be a temporary levy on tech giants until a global agreement was reached by the Organisation for Economic Co-operation and Development, with the aim being to ensure that all large tech companies, such as Google, Amazon, and Facebook, pay their fair share of tax in all countries.

But delays have meant that some other countries have pressed on with their own digital tax.

The UK, for instance, announced a plans to implement its own levy by April 2020 if no global solution has been agreed. France also pressed ahead with its own digital service tax which came into force on January 1st, 2019.

Digital tax bill

“We are working on a tax that will be applied this year affecting all companies offering digital services representing a turnover of more than €50 million (£43m/$56m) and €25 (£21m/$28m) million in France,” Le Maire said.

“If these two criteria are not met, they will not be imposed. The tax will be applicable from 1st January 2019, and its rate will be calculated according to a turnover with a maximum [rate] of five percent.”

The tax, he added, would help bring in €500m (£435m/$567m) for the country, but it may prompt digital organisations to avoid France altogether, which could ultimately result in less revenue for the country.

The UK levy, however, is aimed at online companies that generate more than £500m ($651m/€574) per year. The tax levied at 2% of UK derived revenue is intended to eventually bring in £400m ($520/€420m) operating as social media platforms, search engines, or marketplaces.


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