France has announced that it will go ahead with a so-called ‘Apple tax’ this year, whether or not an agreement is reached on an international proposal to ensure tech giants receive the same tax treatment across 137 countries.
Background
Macron made the accusation last August, to defend the country’s decision to impose a tax on the four tech companies.
Other European countries had been debating a similar approach, leading to calls for a single policy across the European Union. This later evolved into a much larger global initiative to be coordinated by the 137 members of the Organisation for Economic Cooperation and Development (OECD).
Tim Cook gave his blessing to the approach, having long called for international corporate tax reform to ensure consistent rules across countries.
To ensure a level playing field, a standard tax formula will be applied by all signatories to the agreement, based on a percentage of profits from local sales.
The OECD started work on the global agreement back in January, but it’s not known how long the process may take.
France going ahead with ‘Apple tax’ this year
France had originally agreed to hold off on its own plans, giving the OECD until the end of the year to reach an international agreement.
However, Reuters today reports that France may now have changed its mind due to the economic hit of the coronavirus crisis.
However, the fallout from the coronavirus outbreak has left finance ministries most focused on saving their economies, potentially jeopardising the end of the year deadline.
“Never has a digital tax been more legitimate and more necessary,” Finance Minister Bruno Le Maire told journalists on a conference call, adding such companies were doing better than most during the coronavirus crisis.
“In any case, France will apply as it has always indicated a tax on digital giants in 2020 either in an international form if there is a deal or in a national form if there is no deal.”
