France to go ahead with digital tax regardless of possible international deal

France will go ahead with its tax on big digital businesses this year whether there is progress or not towards an international deal on the issue, Bruno Le Maire, finance minister said on Thursday. 

In January, France offered to suspend until the end of the year instalments of its tax on big digital companies’ income in France while an international deal to re-write the rules of cross-border taxation was negotiated this year. 

“Never has a digital tax been more legitimate and more necessary,” Finance Minister Bruno Le Maire told journalists on a conference call, adding such companies were doing better than most during the coronavirus crisis. 

Almost 140 countries are negotiating the first major rewriting of international tax rules in more than a generation, to take better account of the rise of big tech companies that often book profit in low-tax countries. 

However, the fallout from the coronavirus outbreak has left finance ministries more focused on saving their economies than overhauling outdated tax rules, making a deadline of the end of the year to wrap up the talks look increasingly compromised. 

“In any case, France will apply as it has always indicated a tax on digital giants in 2020 either in an international form if there is a deal or in a national form if there is no deal,” Le Maire said. 

France’s national tax has been a source of contention with Washington, which considers that it unfairly targets U.S. digital companies. 

Reported by Leigh Thomas 

Sourced Reuters 

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