France imposes GAFA tax on Google, Apple, Facebook and Amazon from 2019 onwards

Bruno Le Maire, the French Minister of Economy, has announced that from 1 January 2019 France will impose a tax on large internet giants. It is at least Google, Apple, Facebook and Amazon, which are jointly referred to as ‘GAFA’.

This ‘GAFAtax’ is according to Le Maire anyway applicable from the first day of 2019. This covers the whole of the following year, which, according to him, the French treasury estimates an amount of 500 million euros. It is not just a tax that is limited to the turnover of the internet companies; the tax is also set on the income from advertising and the trade in personal data.

The French minister said earlier that France was prepared to wait until March for an EU-wide deal to tax tech giants. Le Maire said a month ago that the EU had almost reached agreement on this point. Last week it turned out that the European Parliament already approved the tax for the tech giants . However, the European Commission and the Council also have to agree. The French government apparently does not want to wait any longer, which is probably partly caused by the pressure of the yellow vests movement and the French impatience on this point.

In March, the European Commission announced a plan to to charge tech companies for their digital activities. This is expected to generate five billion euros per year, based on a rate of three percent. According to this EU plan, only tech companies of any size will have to deal with it. For example, they must have an annual worldwide turnover of at least 750 million euros and income from European activities must be at least 50 million euros a year.

France has been a strong supporter of a special tax for large internet companies for many years. In 2012, the then French president Sarkozy already wanted such a tax. The country finds it unacceptable that the companies involved take billions of euros from the country, but pay little or no tax. Le Maire also does not find it fair that the internet giants pay much less tax than smaller companies.