Thursday, March 14, 2019
French Finance Minister Bruno Le Maire has provided further details of France's proposed digital services tax, which will be put before the cabinet this week.
In an interview with Le Parisien, published on March 3, 2019, Le Maire said that the tax is intended to target companies earning a commission from connecting customers to businesses. The tax would also apply to revenue from online advertising and the resale of personal data for online advertising purposes, Le Maire clarified.
The tax is to be paid by companies with global revenues of at least EUR750m (USD852m) and sales in France of EUR25m or more. It is expected that the tax will be levied at a rate of three percent and raise EUR500m in additional tax revenue per year. However, the digital tax will be deductible for corporate tax purposes, Le Maire added.
According to the minister, around 30 companies are expected to be caught by the tax, most of which are American.
Le Maire assured the publication that the tax would not be contrary to the terms of the double tax avoidance treaty between France and the United States.
Subject to the enactment of the necessary legislation, the tax would be effective from January 1, 2019.