The government is planning a tax on the ‘GAFA’ to raise €500m.
Background: France has been one of the strongest proponents of a European Digital Tax, which has gained popularity among some large EU countries (also including Spain, Germany, Italy, and the UK) but met the skepticism of many others among the EU28. A recent ECOFIN meeting within the EU Council showed how difficult it is proving to reach an agreement, as France and Germany had to abandon a more ambitious proposal in favour of a more watered-down approach, which still has no guarantee to be successful.
Why is France now going alone? The Finance minister Bruno Le Maire had already voiced his impatience earlier this month, saying France would wait until March for a European solution. The recent break-out of protests in the country have now forced the government to make significant short-term changes to its fiscal and economic policies, and left the government searching for funds to cover the extra costs.
What will the tax look like? The tax is labelled as one applying only to ‘GAFA’ (Google, Apple, Facebook, Amazon). It will be levied on sale of private data and advertising services. The government expects to raise about €500m from it, and is aiming to design it so that small businesses are not affected. It will apply from 1 January 2019.
