France introduces tax on big tech companies against US wishes

On Thursday, the French Senate approved the proposal for a so-called gafa tax: a tax on large tech companies such as Google, Amazon, Facebook and Apple. The US has criticized the plans.

The plans, approved by the French Senate on Thursday, include a 3 percent tax on sales made by tech giants in France, such as from targeted online advertisements. The country focuses on companies that generate more than 750 million euros annually with their digital activities. That would be about thirty. In addition to Google, Amazon, Facebook and Apple, Airbnb, the French advertising company Criteo and dating service Meetic also fall under this, Le Monde writes.

The tax is expected to bring in the French treasury about 400 million euros this year, which should increase to 650 million euros next year. President Macron announced the gafa tax in late 2018, at the time of the yellow vest demonstrations, as part of a package of economic and social measures. The idea was to tax digital activities that ‘create value through French internet users’. France accepted an earlier European proposal that failed because Ireland, Sweden, Denmark and Finland did not support it. Meanwhile, Italy, the United Kingdom and Spain have similar plans.

The United States is displeased with the French tax proposal and American politicians speak of protectionist measures aimed at American companies. US President Trump has therefore ordered an investigation into the French plans.