France’s lower house of parliament approved Thursday a small, pioneering tax on internet giants such as Google (owned by parent Alphabet Inc.), Amazon.com Inc. and Facebook Inc. – and the French government hopes other countries will follow suit.
The bill aims to stop multinationals from avoiding taxes by setting up headquarters in low-tax European Union countries. Currently, the companies pay nearly no tax in countries where they have large sales such as France.
The bill foresees a 3-per-cent tax on the French revenues of digital companies with global revenue of more than €750-million (US$847-million), and French revenue of more than €25-million.
The bill adopted by the National Assembly goes to the Senate next week, where it is expected to win final approval.
The tech industry warns it could lead to higher costs for consumers.
It could affect U.S. companies including Airbnb Inc. and Uber Technologies Inc. as well as those from China and Europe. It primarily targets those that use consumers’ data to sell online advertising.
The French Finance Ministry has estimated the tax will raise about €500-million a year this year but that should increase “quickly.”
France failed to persuade EU partners to impose a Europe-wide tax on online giants, but is now pushing for an international deal with the 34 countries of the Organization for Economic Co-operation and Development.