Paris and Berlin arrived on Tuesday (December 3rd) at a compromise on the Internet giants tax bill, whose entry into force is postponed until the end of 2020. But the French government had to make concessions.

France has stepped back Tuesday to try to save the European tax on the digital economy, proposing with Germany a watered down version of one of the flagship projects of President Emmanuel Macron.

"I prefer to review our ambitions [...]. This time we can have an outcome because we have adopted a more conciliatory attitude , " French Finance Minister Bruno Le Maire admitted to reporters after a meeting in Brussels with his 27 counterparts from the EU.

With @OlafScholz, we presented to our European partners our joint proposal for the taxation of the digital giants. This is a solid foundation that will allow us to find a European agreement at 27 before March 2019 #Ecofin #Europe #GAFA pic.twitter.com/BvflX8L1iP

- Bruno Le Maire (@BrunoLeMaire) December 4, 2018

On 6 November, at a previous meeting in the European capital, Paris had already put water in its wine, agreeing to postpone the entry into force of the tax at the end of 2020 to convince reluctant countries.

This time, it is the compromise reached in the night Bruno Le Maire and his German counterpart Olaf Scholz who exposes himself to criticism.

A significantly reduced trim

In this text, Paris and Berlin "call on the EU countries to adopt this draft directive no later than March 2019 for entry into force in 2021, if no solution at the international level is found by then" .

The Franco-German proposal provides for a taxation of turnover (and not profits as is customary) at 3%, as was the case in the offer put on the table by the European Commission on March 22 2018. On the other hand, this proposal considerably reduces the base compared to what was foreseen in this Commission project, since it proposes to focus only on the taxation of the sale of online advertisements, therefore essentially on Google and Facebook.

In the initial proposal of the European executive, it was also planned to tax the sale of data by online sellers, platforms and service providers. The plate was therefore wider.

Paris and Berlin also state that EU member states that so wish can implement stronger taxation at the national level.

"A slight decline"

On Tuesday, Bruno Le Maire and Olaf Scholz presented their proposal to their EU counterparts, with the aim of convincing the most restive in the coming weeks, namely Ireland, Sweden, Denmark and Finland.

Olaf Scholz recalled once again that his preferred option was an international agreement. "In the OECD, we are confident that an agreement will be reached in 2020," he said.

European Commissioner for Economic Affairs Pierre Moscovici welcomed the Franco-German compromise. "It's a good thing," he said, agreeing, however, that it was a "slight retreat . "

Fear of US commercial retaliation

"There is an elephant in the room," said Pierre Moscovici, repeating in English the English expression which means the existence of an obvious problem but that one chooses not to mention (for various reasons).

In fact, he explained, Berlin was hobbling four fetters so far to introduce a European tax on the digital economy "for fear of US trade retaliation by the Trump administration", which could consider it a protectionist measure of the EU.

Therefore, this is a considerable step forward, pleaded the former French Minister of the Economy. The CCIA, an organization representing the interests of digital companies, including Facebook and Google, lambasted however the approach, and encouraged Europeans to "achieve international tax reform, rather than take unilateral actions that would be detrimental to Europe's digital businesses and prevent international cooperation" .

Noting that many tax reform projects had recently failed in the EU due to the need for unanimity among all Member States, Pierre Moscovici spoke of his intention to propose a "qualified majority vote" in January. in some cases.

"I want to put the foot in the door of unanimity. There are subjects on which unanimity is not desirable, not defensible, " he said.