France To Pass Law Curbing Tax Avoidance By US Tech Firms.
France intends to strip away tax loopholes "creatively" exploited by U.S. tech firms such as Amazon.com and Apple Inc. to avoid paying their fair share of taxes despite making billions of dollars in profits every year.
(https://gizmodo.com/amazon-may-finally-have-to-start-paying-taxes-in-franc-1833040079) The French government of president Emmanuel Macron has unveiled a tax proposal targeting 30 mainly American tech firms and those from a few other countries. This legislative effort intends to end tax avoidance and advance fiscal justice at a time when rampant American tax avoidance continues to deny countries the taxes they say are rightly due them.
Tax avoidance is the legal exploitation of a country's tax regime to reduce the amount of tax due by means within the law.
The new tax law put forward by Minister of the Economy and Finance Bruno Le Maire will charge 3 percent on French revenue and could yield over $565 million (a[logical not]500 million) in tax revenue. The tax targets firms with $850 million (a[logical not]750 million) in global revenue and $28 million (a[logical not]25 million) in French revenue.
It will hit U.S. tech giants first and foremost, including Amazon, Apple, Google, Facebook and Airbnb. A number of French, Chinese, and other European firms will also be affected by the firm's new tax rates.
Le Maire said the bill will be presented to the French cabinet on Wednesday and later to the French Parliament.
"Taxing digital giants is a matter of fiscal justice," tweeted Le Maire.
Some tech firms pay little or no taxes at all in Europe, according to the European Commission. In the European Union (EU), internet companies pay an 8 percent tax on profits, while other companies pay 23 percent.
France's action to put a lid on tax avoidance follows by just two weeks widespread media reports confirming (https://www.ibtimes.com/amazon-will-pay-zero-tax-2018-trumps-tax-cuts-act-blame-2765011) Amazon will pay zero in federal taxes on its taxable income of $11.2 billion for 2018 due to the company's use of tax avoidance. Amazon also paid no taxes on its taxable income of $5.6 billion in 2017.
Amazon's tax avoidance also means it will pay a -1 percent federal income tax rate this year after paying a federal rate of more than 11 percent between 2011 and 2016. Worse, Amazon will receive a federal tax refund of $129 million this year due to a combination of tax credits and deductions. Amazon received a far larger refund of $137 million in 2018.
Alexandre Bompard, CEO of French multinational retailer Carrefour S.A., urges action to end the taxation imbalance between internet firms from the United States and China and brick-and-mortar businesses like his own that pay hefty taxes
"They pour their products onto markets without even paying value-added tax, and hardly any other tax at all, it is intolerable," said Bompard. "On the same turnover, they should pay the same tax."
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|Publication:||International Business Times - US ed.|
|Date:||Mar 5, 2019|
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