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The tax will be paid by large digital companies. Le Maire specifically mentioned Google, Apple, Facebook, and Amazon, but other large digital service providers would also be affected. The announcement did not include important details of the new tax, which will be decided upon later in December.
It is expected that the tax will resemble the proposal from the European Commission, which would amount to 3% on revenues derived from digital activities in which users play a role in value creation. The EU proposal would apply to companies with annual revenues of 750 million euros and total annual revenues from EU digital activities of more than 50 million euros. However, as noted, details of the proposed French tax are not yet available.
The government said that these companies pay, on average, about 14% less in tax than domestic companies, and one aim of the tax is to level the playing field.
The announcement comes as something of a surprise, since France had previously said it would wait until March for other EU finance ministers to agree on a digital services tax before France would take action.
It is unclear what impact the tax would have on consumers, or how broadly it would apply.
Worldwide ERC® members with digital revenues in France could be affected. In addition, the advance of digital tax proposals may eventually alter the costs of doing business in countries that adopt them, and also affect the costs of maintaining expat employees there.
Worldwide ERC® continues to monitor the impact of the Tax Cuts and Jobs Act on talent mobility programs and policies.
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