Offbeat France is enough: digital tax for Facebook & Co. starts

24 hours in the ICU: Fighting for an open bed in coronavirus

MARSEILLE, France (AP) — Four more calls to go, each with careful words, painful silences. It’s 2 p.m. in the intensive care ward of Marseille’s La Timone hospital, and Dr. Julien Carvelli is phoning families hit by the second wave of the coronavirus with news about their children, husbands, wives. With intensive care wards at over 95% capacity in France for over 10 days, Carvelli makes at least eight of these difficult calls a day. InIt’s 2 p.m. in the intensive care ward of Marseille’s La Timone hospital, and Dr. Julien Carvelli is phoning families hit by the second wave of the coronavirus with news about their children, husbands, wives.

France is pushing ahead with a new digital tax that will hit US tech giants. The new levy will see the firms taxed 3 per cent on earnings from online sales, digital advertising The French gave US officials a year to sort out an alternative arrangement with the Organisation for Economic Co -operation and

Facebook , Inc (NASDAQ: FB) and Amazon.com, Inc (NASDAQ: AMZN) have received a demand of millions of euros from the French tax authorities, the Financial Times reports.What Happened: France seeks to collect " digital tax " for 2020 from the U.S. technology groups.The digital tax has been a

The neighboring country has sent the first notices to US technology giants in which it is demanding the future tax burden. On the international stage, however, there is disagreement. © Koshiro K / Shutterstock After the first letters of the tech companies Google, Amazon, Facebook and Apple, the digital tax is also called the GAFA tax.

The French tax office has now confirmed a report by the Financial Times, according to which it has delivered tax assessments to , among others, to Google, Amazon, Facebook and Apple . The first letters of the four tech giants form the slang term for the tax: GAFA tax.

Previously, international negotiations due to which France had suspended the tax introduced in 2019 had failed with the USA. At the time, US President Trump threatened punitive tariffs on French products worth 1.1 billion euros. The US left the negotiating table of the OECD (Organization for Economic Cooperation and Development) in June. For months, the EU had wrestled with representatives of the US government over the "unfair tax" (quote from Donald Trump). In October, the OECD announced that an agreement could not be expected until mid-2021 at the earliest.

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Alan Lee, Facebook global tax policy head, said the tax is likely to “hinder growth and innovation in the digital economy,” while Google trade policy counsel All global multinationals operating in France will have to pay the tax – including 30 companies from the United States, China, Germany, Spain and

France has adopted a pioneering tax on internet giants like Google, Amazon and Facebook despite threats from the U.S. The French digital services tax would impose a three per cent annual levy on French revenues of digital companies with yearly global sales worth more than €750 million (.1

3 percent on local sales

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Since no agreement has been reached - neither within the EU nor transnationally - France is now leaving on the offensive. The corporations have to pay three percent of the sales generated in the country. The levy affects around 30 companies with a minimum turnover of 25 million euros in France and at least 750 million euros worldwide. So far, the tech giants hardly pay any taxes in the EU. On the one hand, because they have their headquarters abroad - often in the USA - and on the other hand because they distribute the tax burden in tax havens through a network of subsidiaries and license agreements.

Plan B: The European Union

EU Commission President Ursula von der Leyen has already announced her own tax if the OECD negotiations fail. She wants to use the proceeds, for example, to counter-finance the Corona aid package in the amount of 750 billion euros. However, so far neither the Council nor the finance ministers have been able to agree on a common line. Associations also criticize the plans: The digital corporations would probably pass the tax burden on to consumers. This reaction can already be observed: In the corresponding countries, Amazon has passed the levy on the marketplace dealers and carefully listed . Google also raised the prices for advertisers, including a specific mention.

French industry unhooked, an evil that comes from afar

© LOU BENOIST Aerial view of the industrial zone of Rouen, September 15th. In a comprehensive report, France Strategy analyzes the degradation of the sector in France, much more marked than elsewhere in Europe. The institution calls into question the taxation, not the level of wages. 600 pages long, the latest report from France Stratégie , devoted to “France's industrial policies” is dense, precise and detailed.

Facebook said that since 2018, it had changed its sales structure so that "income from advertisers supported by our teams in France is registered in this country". The BBC understands that Facebook paid a tax rate in France of 38% in 2019, which is above the statutory income tax rate of 33.3%.

Of course, the amount of tax such companies pay in France is the issue here. A degree of global coordination may appear in the next year under the banner of the Organization for Economic Co -operation and Development (OECD,) which was sounding hopeful in a January report on the issue.

A lot of money and already planned

If an agreement is reached, the OECD is expecting income of 100 billion euros. However, observers assume that the US will increase tariffs in return. They are not yet included in the invoice. France only calculated an increase in the state treasury of 400 million euros for this year and 650 million for the next year. Now you hear that in 2020 there will be only 350 million . Austria, Turkey and Italy all have similar tax laws. Germany's finance minister Olaf Scholz recently indicated that with the election of Joe Biden's as president, Washington expected a “new willingness” to cooperate. Biden has not yet commented on the OECD negotiations. Observers expect the US government to continue its tough course.