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France: Amazon passes on costs of French digital tax to customers

2019-08-03T09:18:44.372Z

France's digital tax targets internet companies that channel their profits abroad. Now Amazon has announced that the costs will be transferred to its corporate customers.



The online retailer Amazon has announced that it will transfer the costs of the new French digital tax to its customers. "We have no option but to pass it on," the group said. The competition is tough and allow now only small margins. In addition, the group would currently make "massive investments". Specifically, the cost of the tax should be allocated to the third-party providers that offer products on the Amazon platform Marketplace. The transfer of tax costs to customers could bring disadvantages especially for small French companies in international competition, said Amazon representatives of the news agency AFP. The company warned the authorities about this consequence of the digital tax.

The French Ministry of Economic Affairs disagreed with this presentation. There is nothing that would oblige Amazon to transfer the costs to small and medium-sized companies that use Amazon as a platform.

The French parliament decided in March to levy a digital tax retroactively to 1 January. Previously, there were European aspirations to introduce an EU-wide digital tax. However, this failed due to resistance from some member states, so the decision was postponed until the end of 2020. Until then, France has decided to tax the turnover of Internet companies with three percent.

The digital tax hits especially large US companies like Facebook, Apple, Google and Amazon. They are criticized because they pay very little tax through skillful profit transfers, for example, by diverting all profits from Europe to low-tax countries such as Luxembourg or Ireland. Ireland was also one of the countries that had prevented a European digital tax. By taxing the turnover, the transfer of profits to other countries can be compensated. The French Ministry of Finance expects revenue of € 400 million from the tax by the end of this year.

With major US corporations in the first place, President Donald Trump has criticized the tax plans and suggested the possibility of punitive tariffs on French wine, a move that France's finance minister Bruno Le Maire did not understand because it was completely different Economic activities. Le Maire also said that France wanted an international settlement and wanted to "work closely with our American friends." Until the G7 summit in late August in Biarritz, southern France, he hopes for an agreement. Furthermore, the levy is not targeted against US companies, even Chinese and European Internet companies are affected. The tax is titled "Gafa" - for Google, Amazon, Facebook and Apple. The US has accused France of discriminating against US companies and announced they were investigating.

Source: zeit

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