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France to begin imposing taxes on tech companies in January

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France to begin imposing taxes on tech companies in January

France will impose a tax on digital companies, such as Alphabet Inc.'s Google LLC and Facebook Inc., beginning January 2019, absent an agreement with the European Union on the proposed levy, London's Financial Times reported Dec. 18.

Included in the levy on digital companies in France are taxes on the sale of private data and revenues from online marketplaces, the report said, citing the finance ministry's spokesperson.

Finance minister Bruno Le Maire said the move is intended to raise €500 million in funds in its first year, U.K.'s The Guardian reported Dec. 17.

Le Maire earlier said that he intended to wait for the EU to reach an agreement on the digital tax implementation until March, before France acts on its own. However, France is implementing the new taxation a few months earlier than planned to appease the "gilets jaunes" or yellow vest protesters, which has effected an estimated 3% deficit in the country's budget.

Shortly before France's announcement, members of the European parliament on Dec. 13 voted by an overwhelming majority for the amendments on the proposed 3% tax on digital companies' revenues in Europe. The amendment extends the list of services that qualify for the region's proposed crackdown on tax avoidance to digital content providers.

Lawmakers are pushing to have the laws approved by April 2019. Politicians, however, said the new policy would remain a temporary framework while broader, permanent schemes are negotiated by the Organisation for Economic Co-operation and Development and the United Nation's G-20.

France and Germany have been in unison in urging the finance ministers to push through with the EU taxation plan.

Similarly, the U.K. also plans for a 2% tax on revenues of multinational technology companies that are generated in the country.