France's Economy Minister Bruno Le Maire. Photo / AP file
France's Economy Minister Bruno Le Maire. Photo / AP file
France moved to impose a 3 per cent tax on Google, Apple, Facebook and other tech giants in a bid to advance an international agreement to clamp down on corporate tax avoidance.
The proposed levy would affect Web companies that bring in more than US$848 million in global revenue andUS$28 million in French receipts, and it would be applied only on domestic sales.
More than two dozen companies meet that threshold, Finance Minister Bruno Le Maire said during a news conference in Paris. Most are US-based, though some large European and Chinese firms also would be compelled to pay.
The tax will raise an estimated US$566 million a year, Le Maire said.
The French proposal, like others from European nations, comes amid broader efforts to modernise the international tax system.
The Organisation for Economic Cooperation and Development is developing a plan to close global tax loopholes that allow billions of dollars to escape government coffers.
Critics say that tech giants generate enormous wealth, but are not appropriately taxed where they do business. There has also been extensive discussion about tax reform in the US 2020 presidential primary.
"These giants have created much value and they have created many jobs, and I will never denounce their success," Le Maire said, according to Bloomberg. "But we must fight against the distortions that these giants have created, especially on tax optimisations and on the dominant positions many have created. We must create taxation for the 21st century."
Le Maire cited EU figures that show major tech companies pay, on average, 14 per cent less tax than other European companies, according to AP. He said the tax would exclude transactions that involve the direct sale of products online but would mostly target firms that use data to sell digital advertising.
The French Parliament is expected to pass the tax proposal later this year.
Facebook said that the company pays all taxes required by law in every country in which it operates. The social network added that it recently began recording revenue in France from advertisers supported by French teams. "We hope that the OECD will finish its work and create a clear, sustainable global agreement on tax," the company said.
Google said it pays the vast majority of its corporate income tax in the US, noting in a statement that it has paid a global effective tax rate of 23 per cent for the past 10 years. "We always pay all of the taxes due and comply with the tax laws in every country we operate in around the world," Google said.
Apple and Amazon did not immediately respond to requests for comment.
