France was the first European country to decide to tax local Google, Apple, Facebook and Amazon revenues – after President Macron accused tech giants of having “permanent tax haven status” »…
Macron laid charges last August to defend the country’s decision to tax the four tech companies.
The reference to “tax haven status” relates to the practices used by Apple and others to channel profits into European sales via Ireland and then to claim large deductions for R&D costs incurred in the United States. There have also been accusations that Apple attributes most of its European profits to a subsidiary that exists only on paper and that pays no taxes anywhere.
Other European countries had debated a similar approach, leading to calls for a single policy across the European Union. This later evolved into a much larger global initiative, coordinated by the 137 members of the Organization for Economic Co-operation and Development (OECD).
In the future, Apple and other tech giants will have to pay taxes in each country in which they sell products and services. […]
To ensure a level playing field, a standard tax formula will be applied by all signatories to the agreement, based on a percentage of local sales profits.
Tim Cook blessed the approach after long calling for international corporate tax reform to ensure consistent rules across countries.
The OECD started work on the global agreement in January, but it is unclear how long the process may take.
France is moving forward with the “Apple tax” this year
France had initially agreed to suspend its own projects, giving the OECD until the end of the year to reach an international agreement.
however, Reuters reports today that France may have changed its mind due to the economic crisis of the coronavirus crisis.
Paris proposed in January to suspend its digital tax on the income of technology companies in France until the end of the year during the negotiation of an international agreement.
However, the fallout from the coronavirus epidemic has left finance ministries more focused on saving their savings, which could jeopardize the end-of-year deadline.
“A digital tax has never been more legitimate and more necessary,” said Finance Minister Bruno Le Maire during a conference call, adding that these companies were doing better than most during the coronavirus crisis.
“In any event, France will apply because it has always indicated a tax on digital giants in 2020 either in an international form if there is agreement, or in a national form if there is disagree. “
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