Share11 July 2019The French Parliament has approved the tax on web giants. The proposal provides for a 3% tax on the turnover of technology companies with revenues of more than 750 million euros globally and 25 million in the country.
The tax is nicknamed Gafa : an acronym for Google, Facebook, Apple and Amazon. In the last few hours the American authorities have started an investigation to see if the size of the new taxes represents an unfair commercial practice under the 'Us Trade Act' of 1974; and the move could prelude to retaliatory duties on wine or French cars.
The tax does not only affect US giants, but about thirty companies in all, including Chinese, German, British and Spanish companies.
The American threat has raised a heated reaction from the Economy Minister, Bruno Le Maire, before the senators: "Among the allies, we can and must resolve the differences differently than with the threat," he said, claiming that It is the first time in the history of relations between the United States and France that the American administration decides to open an inquiry into the article of the trade law called 'Section 301'. And he urged to find "an international solution for digital taxation".
The French 'Gafa tax' is largely inspired by the European project that failed to pass due to the reluctance of Ireland, Sweden, Denmark and Finland. But this absolutely unilateral solution is destined to be temporary, pending the outcome of international negotiations. The G20 of finance ministers, which met in early June in Japan, has made progress on the issue: the world's major economies have pledged to "redouble their efforts" to "re-establish fiscal justice on the international scene", he still remembered Le Maire.
The goal is to reach a final agreement by 2020, a turning point made possible by the change in attitude of the United States, which had blocked negotiations for years. But important differences remain on how to implement it, also because Washington would like an approach not limited to the digital sector.
For the left, the tax goes in the right direction. Announced by president Emmanuel Macron at the end of 2018, in the midst of the 'yellow vest' crisis, revenues will be used to finance the 10 billion euros of urgent measures, in the economic and social sector, which have been put on the table to appease the anger of the protesters.