France to introduce new ‘Digital Tax’ on New Year

With efforts to reform a European Union tax law not bringing the desired results, France is going to introduce from January 1, 2019, a digital tax on technology giants such as Google, Facebook, Apple and Amazon, the media reported.

The French government's "GAFA" tax" is being introduced to combat attempts by the firms to avoid paying what is considered a "fair share" of taxes in the country, by taking advantage of European tax laws.

French Finance Minister Bruno Le Maire said he expected it to bring in €500m (£450m) in 2019.

France, along with Germany, had been pushing for the European Commission to agree on measures by the end of this year.

But it is opposed by countries including Ireland, the Czech Republic, Sweden, and Finland.

Earlier this year, the European Commission published proposals for a 3% tax on the revenues of large internet companies with global revenues above €750m (£675m) a year and taxable EU revenue above €50m.

The move would affect companies such as Google, Apple, Facebook, and Amazon.

But critics fear an EU tax could breach international rules on equal treatment for companies across the world. EU tax reforms need the backing of all member states to become law.

In the UK, Chancellor Philip Hammond announced in the Budget in October that he plans to introduce a digital services tax from April 2020 following a consultation. Chancellor Philip has said the tax would raise up to £400m for the Treasury.

Countries including the UK and France have accused firms of routing some profits through low-tax EU member states such as Ireland and Luxembourg.

Big US tech companies have argued they are complying with national and international tax laws. However, the Commission said it wanted to tax companies according to where their digital users are based.