French Lawmakers Agree Digital Tax Law

01/07/2019

A joint committee of lawmakers from the French House of Representatives and the Senate has agreed on a bill to introduce a digital services tax in France.

Under the French digital tax, a three percent tax rate will be imposed on digital companies providing advertising services, selling user data for advertising purposes, or performing intermediation services. Companies with global revenues of EUR750m (USD852m) or more and French sales of at least EUR25m will be required to pay the tax.

The tax is intended to apply to turnover realized in France since January 1, 2019, and is expected to affect around 30 companies supplying digital services in France.

According to a Senate press release issued on June 26, 2019, several amendments adopted by the Senate at first reading have been retained in the text of the bill. These changes are intended to improve the tax, facilitate its implementation, and ensure the tax is more legally secure, including with respect to data protection laws.

The committee also agreed to include a Senate amendment that compels the Government to explain to parliament why it did not notify the European Commission about the digital tax for state aid clearance.

While the Senate originally pushed for the tax to be temporary until internationally agreed digital tax measures were implemented, the committee decided to not set a specific date for the tax's expiry. However, the committee agreed that the report on the implementation of the tax must include a date on which any measures agreed at international level will replace the French digital tax.

Source: Pride Partners International