Fair tax contribution: 75 major tech players sign the French initiative

WION Web Team
Paris, France Published: Nov 30, 2020, 07.12 PM(IST)

The logos of Amazon, Apple, Facebook and Google are seen in a combination photo. Photograph:( Reuters )

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Tech big-hitters such as Google, Facebook, Microsoft, Twitter, Snapchat, and Huawei have also signed the initiative

Some 75 major tech players are backing a French initiative committing them to make a "fair tax contribution" in countries where they operate.

French President Emmanuel Macron unveiled the "Tech For Good" initiative at the Elysee Palace on Monday in a move designed to draw up the ground rules for ensuring the internet is a borderless "free, open and safe space".

Tech big-hitters such as Google, Facebook, Microsoft, Twitter, Snapchat, and Huawei have also signed the initiative. Assorted tech 'unicorns', start-ups and NGOs have also joined.

Also read: Britain bans installation of new Huawei 5G equipment from September 2021

Two big names yet to sign on are Amazon and Apple, but French presidential sources said both have expressed a "desire" to join.

The initiative comes with France having last week pledged to enforce a new digital levy for online technology giants, breaking a truce with Washington over a long-running tax fight that could prompt a round of punitive US tariffs on French goods.

France suspended collection of the tax, which will hit companies like Facebook and Amazon, early this year while negotiations were underway at the Organisation for Economic Cooperation and Development (OECD) on an overhaul of international tax rules.

The finance ministry has long said it would collect the tax in December as planned if the talks proved unfruitful by then, which is what happened when the nearly 140 countries involved agreed last month to keep negotiating until mid-2021.

"Companies subject to the tax have received their notice to pay the 2020 installment," a ministry official said.

France last year applied a 3 per cent levy on revenue from digital services earned in France by companies with revenues of more than 25 million euros there and 750 million euros worldwide.

Facebook's stance "is to ensure compliance with all tax laws in the jurisdictions where we operate", it said, adding it had received its tax bill from the French authorities.

Amazon has received a reminder from the French authorities to pay the tax and will comply, according to a person familiar with the matter at the online retailer.

Paris has said it will withdraw the tax as soon as an OECD deal is reached to update the rules on cross-border taxation for the age of online commerce, where big internet companies can book profits in low-tax countries regardless of where their customers are.

The talks stalled as the Trump administration became reluctant to sign on to a multilateral agreement, officials have said.

"We will levy this digital taxation mid-December as we always explained to the US administration," French Finance Minister Bruno Le Maire told a Bloomberg event on Monday.

"Our goal remains to have an OECD agreement by the first months of 2021," he said.

Dan Neidle, a partner at law firm Clifford Chance, was skeptical US President-elect Joe Biden would agree to such a deal.

"I'm not sure why Biden would agree to something which enables US corporations to pay more tax in Europe and has not many benefits to the US," said Neidle.

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