Companies like Google, Amazon, Facebook and Apple pay almost no taxes in many countries, including Germany and France. Some members of the European Union (EU) are therefore calling for a so-called digital tax, which would tax the local turnover of companies. So far, however, no agreement has been reached on this within the EU.
France has therefore already introduced a tax colloquially known as the GAFA tax (Google, Amazon, Facebook and Apple) was introduced, but its collection has been suspended until now. In response to the tax, US President Trump threatened to impose punitive duties of 1.1 billion euros on French products. Negotiations between the U.S.A. and the EU on the design of the tax were broken off by the U.S.A. in June 2020. According to the Organisation for Economic Cooperation and Development (OECD), an agreement is therefore not expected before summer 2021 at the earliest.
France sends out tax assessment notices
According to a report by the Financial Times France has now sent its first tax assessments to Google, Amazon, Facebook and Apple, among others, and to some 30 other companies. Affected are groups with a global turnover of at least 750 million euros and a minimum turnover in France of 25 million euros. The amount of the digital tax is three percent of all revenues generated in the country.
European Union digital tax
Should the OECD negotiations fail, the EU will introduce its own digital tax, according to Commission President Ursula von der Leyen. The additional tax revenues are to be used, among other things, to finance Corona aid packages worth 750 billion euros.
However, the finance ministers and the Council have not yet been able to find a common line. In addition, associations criticize the plans because they fear that the additional taxes will be passed on to the end customers by the digital companies. This is already becoming clear with Amazon, which has adjusted the fees of Marketplace merchants in affected countries, and with Google, which plans to increase advertising prices if a digital tax is introduced.
100 billion euros of revenue
If an agreement is reached in the OECD negotiations, the organization expects additional tax revenues of 100 billion euros. France originally calculated its digital tax at 400 million euros in 2020 and 650 million euros in 2021, but has now adjusted its estimate to 350 million euros.
Apart from France, Turkey and Italy have already passed similar tax laws. According to Finance Minister Olaf Scholz, Germany wants to wait and see for the time being whether Joe Biden as president showed a "new willingness" to cooperate. Although Biden has not commented on the OECD negotiations so far, experts assume that the U.S. will not deviate from its hard course. Should a digital tax be introduced, the US government is likely to impose punitive tariffs in return.