The French Senate and the National Assembly have approved legislation which now means companies are liable for a 3% digital services tax when their digital revenue exceeds €750 million ($850m; £670m) worldwide and more than €25 million being generated through French revenue.
This new tax has been designed to be exempt from start-up companies, targeting only the largest tech companies such as Google, Apple, Facebook and Amazon, and seems to be purely aimed at multinational tech companies based in the United States. It will be retroactively applied from early 2019 and is expected to raise about €400m in 2019 alone.
The definition provided for qualifying activities states:
- The provision of a digital interface to enable users of platforms to interact with each other with a view notably to exchange goods or services.
- Targeted advertising conducted on digital interfaces including transfer and management of personal data for advertising purposes.
Whilst the legislation still needs approval by the president, which is commonplace, it is expected to be approved within the next two weeks as next to no opposition to the proposed tax has surfaced.