EU will have agreed a tech tax by March, says French finance minister

Bruno le Maire confident despite 'hesitant' nations

The French finance minister has said he expects the European Union to agree on a digital services tax by March – a year after the bloc's initial proposal.

The European Commission had suggested a 3 per cent levy on firms with a global annual turnover of €750m and annual EU revenue of at least €50m – but the measures were branded fundamentally flawed by some nations.

Compromises were suggested in the face of such opposition, but efforts to strike a deal by the end of the year ultimately failed.

However, French finance minister Bruno le Maire this weekend took a more positive view, saying that progress was being made.

In an interview with French Sunday paper Le Journal de Dimanche, le Maire said there were still some "hesitant countries" but he was convinced there would be agreement by the end of March – just in time for European elections in May.

The EU's levy was only intended as an interim measure until a global consensus was reached by the Organisation for Economic Co-operation and Development, with the aim being to ensure that digital giants pay their fair share of tax in all nations.

But the delays at both levels have led to some countries going it alone. That includes the UK, which plans to implement a levy in April 2020 if no EU or global plan has been agreed on, and France, which announced its own tax at the end of last year.

Le Maire said this would affect companies offering digital services that have a turnover of more than €750m worldwide and €25m in France. The tax rate will depend on turnover, up a maximum of 5 per cent, and apply from 1 January 2019. He said it will bring in €500m for the nation.

The UK's proposal, meanwhile, is for a 2 per cent levy on revenues of parts of digital businesses that derive "significant value" from British users.

It will apply to firms that generate more than £500m in global annual revenues from in-scope business activities, and more than £25m in annual revenues from qualifying activities linked to the participation of UK users. There will be no tax on the first £25m of UK taxable revenues.

However, some have criticised these unilateral actions, noting the array of different rates and approaches to tax, and arguing they distract from the collaborative negotiations the nations claim to favour. ®