Thursday, April 15

Google notes higher ad rates in France and Spain after digital tax

France collects the rate since 2019, and Spain since this year, low
Voter pressure for U.S. tech giants to pay a higher share of taxes on
countries where they operate.

The advertising fee increase is to “cover a portion of the cost of complying with the laws
on taxes on digital services in France and Spain ”, the Internet giant
he said in an email seen by AFP.

In France, Internet companies with more than 750 million euros ($ 895
million) in worldwide sales, and 25 million in France, must pay three
percentage tax on its operations in France, in particular sales of advertising and
market operations.

Spain also charges a three percent tax on some of its companies.

Jean-Luc Chetrit, director of the Union des Marques, an alliance of important
brands, said Google’s decision “would amputate the investment capacity of
brands at a time when all companies are going through an unprecedented crisis. “

Google did not respond to AFP requests for comment, but Karan Bhatia, its head of government affairs, warned in February that “taxes on digital services complicate efforts to reach a balanced agreement that works for all countries.”

“We urge these governments to reconsider what are essentially tariffs, or
at least suspend them while the negotiations continue, ”he said.

Google, as well as Apple, Facebook and Amazon, grouped as “GAFA”, are in the crosshairs of European governments who accuse them of exploiting the common rules of the market to declare all the profits of the block in low taxes.
jurisdictions such as Ireland or Luxembourg.

Critics say they are depriving national tax authorities of millions of euros even as they benefit from an increase in online activities due to home work and social distancing rules during the Covid-19 crisis.

Businesses respond that they are being unfairly targeted by discriminatory charges.

Google logo
Google logo. Photo: Eva HAMBACH / AFP

Global agreement?

Amazon had already responded to the French tax last October by raising the fees it charges sellers in the French-based market by three percent.

Apple did the same by increasing the commission it charges developers who
sells applications on its platform not only in France, but also in Italy and Great Britain.

The French tax movement on global digital companies made him a pioneer in the
fight to find a fair tax system for internet multinationals whose taxes
The bill is usually small compared to your income.

When contacted by AFP, Facebook said it had no plans to raise ad prices in
France or Spain for now while waiting for a global agreement on fiscal rules.

The French tax contributed 400 million euros to the government coffers in 2019,
and the administration reapplied the tax last year despite pressure from the Trump administration to withdraw it.

With President Joe Biden in the White House, the Organization for Economic Cooperation and Development (OECD), which oversees negotiations on a digital tax, has said it expects a meeting of G20 finance ministers in July to strike a deal. about the topic.

Last month, the new United States Secretary of the Treasury, Janet Yellen, said that Washington
It would no longer insist on a “safe harbor” clause that would make participation in a global tax scheme optional, removing a key stumbling block with EU officials.

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