On Thursday, the lower house of France’s parliament gave approval of a minute, new tax on the internet giants such as Facebook, Amazon, and Amazon and the government of France is hoping that the other countries would follow the suit as well.
The main aim of the bill is to stop the multinationals from evading the taxes by the usual technique of setting up headquarters in low-tax European Union countries. At present, the firms pay around no tax in the countries where they have large sales such as France.
The bill expects a 3 percent tax on the French revenues of digital firms with global revenue of over 750 million euros which is equivalent to $847 million, and the French revenue of more than 25 million euros.
The bill was adopted by the National Assembly and will go to the Senate next week, where it is anticipated to win the final approval.
The technology industry has already warned that it could result in higher costs for consumers.
In addition to this, it could also affect the United States firms inclusive of Airbnb and Uber, as well as, those from Europe & China. It mainly targets those that use the data of consumers to sell online advertising.
The French Finance Ministry has predicted that the tax will raise about 500 million euros which is equivalent to $566 million per year this year but that should increase rapidly.
France has failed to persuade the European Union partners in imposing a Europe-wide tax on the online giants, however, it is now making efforts for an international deal with the 34 countries of the Organization for Economic Cooperation & Development so that they can support France in its effort.