France choice not rest until its plan for an EU-wide digital tax gets approved in preference to the end of the year, the country’s finance minister said Tuesday.
The French administration has pushed for a new levy on internet giants, such as Google, Apple, Facebook and Amazon, in brotherhood to make these firms pay what they see as a fairer tax rate in the jurisdiction. This measure is likely to get some sympathy among voters in front of next spring’s European elections. However, some technical imbalances among European countries have not allowed substantial progress on this overlook. Critics of the new tax also say that it could stifle innovation.
“We want the adoption of the directive on digital taxation by the end of this year. This is a wholly red line for the French government,” Bruno Le Maire, France’s finance see to told reporters in Brussels as he prepared to discuss the issue with his European counterparts.
“We are hip there are some technical issues and technical concerns, but these are intricate concerns not political problems, so we still have three or four weeks in the presence of the next Ecofin (a regular meeting between EU finance ministers) to fix those complicated issues,” Le Maire said.
“And I will spend day and night with my German escorts to find a compromise and to find a solution on those technical issues. But unknown could take advantage of those technical difficulties to avoid its national responsibility,” the French lawmaker added.
There are different concerns across Europe in the matter of a new tax on the digital giants. Some member states believe that such a tax at ones desire be harmful for smaller countries, or potentially hurt some traditional industries. Both Ireland and the Netherlands put faith the EU should wait for an international approach to avoid looking “anti-business.”
“For the benefit of fairness and efficiency, nobody can understand anymore that you have a very of taxation for European companies (that is) 14 points above the tied of taxation of the internet giants,” Le Maire added.
The French politician combined that it would be a “political failure” to wait any longer. Any delay could inflate the risk of individual countries that are in favor of the tax — including the U.K. and Spain — active ahead with a new levy and creating a disproportionate tax rate across the sphere, La Maire added.
Despite France’s tough stance, EU finance padres gathered in Brussels didn’t manage to reach an agreement on the tax. According to the Economic Times, the ministers abandoned the idea that an agreement could be reached next month. Countries such as Denmark, Sweden and Ireland highlighting that it order hit their competitiveness.
Meanwhile, Vera Jourova, the EU’s justice commissioner, uttered CNBC’s Karen Tso at the Web Summit in Lisbon Tuesday that there is a “jolly strong” determination in Europe to move ahead with the so-called digital tax. She expounded that it was fair that if the digital industry is making money by speaking the private data of Europeans, then part of that money should visit in Europe.
She suggested that “this money should be reused for average literacy and better, or stronger, resilience of the society against the possible hazards which come from the digital era and digital sphere.”
According to evidence from the European Commission, digital companies pay on average an effective tax scold of 9.5 percent — compared to 23.2 percent for traditional businesses. The EU projects include a “common EU solution” which would allow member voices to tax profits that are generated in their territory, even if these companies do not take a physical presence there.
But, a company would have to fulfill one of the adhere to criteria: its annual revenues in a European country exceeds a 7 million euro ($8.6 million) sill; it has more than 100,000 users in a taxable year; or over 3,000 enterprise contracts for digital services are created between the company and its users in a taxable year.
To whatever manner, and perhaps more importantly, the plans from the European Commission also embody an interim tax measure. This would mean that those occupations which are not currently taxed would begin to generate immediate gross incomes for EU member states. This aims to stop countries taking unilateral performances, creating distortions in the European market, until the long-term solution is applied.
—CNBC’s Ryan Browne granted to this report.