The tax Gafa continues to fuel tensions between France and the United States. After the coup, pressure from Donald Trump last week, which has threatened to retaliate on the French wine, this is Amazon, which increase the tone this time. The company of Jeff Bezos has announced that it will pay the cost of the tax Gafa to the sellers of the Hexagon using its platform from the 1st of October next. An extent that the fear that the traders do not impinge the increase on to consumers.
The tax on digital voted by the French Parliament in July should allow the tax the giants of the Net to the amount of income they generate on the French soil. Overview of the challenges of this new tax :
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What are the taxes for the american giants in France ?
If they very often generate large volumes of sales in different european countries, the large companies in the digital sector are past masters in the art of using the possibilities of tax optimisation within the european Union, particularly by taking advantage of the establishment of their european headquarters in countries with a low tax base, such as Luxembourg or Ireland. Often, they are charging for these countries the services or advertising space sold in France, which decreases mechanically the turnover in the country and more benefits are generated.
Google France has paid eur 17 million of profits tax in 2018, declaring 411 million euros in turnover, and only 29 million of profit. However, its advertising revenues on the French market can be estimated at ” about 2 billion euros “, according to the Union of the regulated internet, cited by the director general of Google France Sebastien Missoffe in December 2018. According to the european commissioner for Competition Margrethe Vestager, the digital companies pay, on average, 9 % of taxes in Europe, compared with 23 % for other companies.
What is the purpose of the “tax Gafa” ?
The French tax on the digital, dubbed the ” tax Gafa “, as the giants Google, Amazon, Facebook and Apple designated by this acronym will be particularly relevant, must allow for the taxation of the turnover actually in France.
The companies referred to must pay an amount of 3 % of their turnover, a tax base easier to make than profits, according to the government. This fee must cover three activities : on-line advertising, the sale to third parties of personal data and the” intermediation “(linking platforms from businesses and customers, such as market places, or ” marketplace “). The tax is expected to bring in $ 400 million this year and 450 million by 2020, 550 million in 2021 and $ 650 million in 2022, according to estimates from the finance ministry.
It is supposed to be transient, the time to reach an agreement at the global level, in practice at the level of the OECD. The topic should be discussed at the next G7 summit, to be held in late August in Biarritz.
Who is affected by this tax ?
The companies that perform more than 750 million euros of turnover in the world and more than 25 million euros in France. This represents a little less than thirty companies, including Google, Amazon, Facebook and Apple. In addition to online marketplaces, such as Rakuten or Alibaba, or services, such as Uber or AirBnB, as well as companies specializing in ad targeting through the use of personal data, to the image of the French Criteo.
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The companies will pass this tax ?
Amazon has informed sellers present on the platform of the relationship with the consumer (his ” marketplace “) that the commissions paid on sales would increase by 3 %, which is between a few tenths of a percentage point and 1.5 percentage point of price increase. On the other hand, the giant is not planning to increase its prices on products sold in France by Amazon itself, or on the Amazon Web services, Amazon Prime, or on the activity advertising. It is a form of warning addressed to the French minister of the Economy. In may, Bruno Le Maire, had felt that ” the consumer, until proof to the contrary were not paying for the advertising that it was looking at “. “However, it is the main income of this tax “, he stressed.
The majority of other companies potentially affected by this tax are very discreet about their intentions. Questioned by AFP, Facebook, Google, and Apple have not made any comment, Uber not responding to solicitations. Very present in France since the acquisition of PriceMinister, the japanese firm Rakuten says that its rates will not increase in 2019 and will decide then, based on the impact of the tax on its results. Criteo has assured that his side have no intention to pass the tax on to its customers.
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