Brussels, BELGIUM — France’s Senate today approved a national tax, which will require major tech companies to pay a 3% tax on their turnover in France applied retroactively from the start of the year.
The justification for the tax is that so-called digital companies pay less tax than traditional firms, a claim that several studies have dismissed.
Plans for a similar European Union-wide tax was abandoned earlier this year in favor of efforts to reach consensus on a more ambitious global tax reform. More than +120 countries, including all the major G20 countries, are working together to develop a consensus for global tax reform by next year.
Yesterday, USTR announced an investigation into whether this French digital tax would violate its trade obligations.
Today, the U.K. government announced its proposal for a 2% turnover tax in its draft legislation for the next Finance Bill. The tax could apply from March 2020.
The Computer & Communications Industry Association has called for ambitious global tax reform, that doesn’t single out so-called digital companies, as opposed to discriminatory national digital taxes.
The following can be attributed to CCIA Vice President and Head of office Christian Borggreen:
“France should take the lead in pushing for more ambitious global tax reform rather than enacting national digital taxes which provokes trade retaliation. This tax tells startups and investors to take their innovation and successful business elsewhere.”
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