France Has 'Conviction' EU Can Find Digital-Tax Deal by Year End

(Bloomberg) -- French Finance Minister Bruno Le Maire said he remains optimistic that the European Union will be able to reach an agreement by year end on taxing digital companies.

Le Maire has “a strong conviction there will be a European solution” on digital taxation reached by year end,” the minister said on Friday at a conference in Strbske Pleso, Slovakia. “I have no doubt about this.”

France Has 'Conviction' EU Can Find Digital-Tax Deal by Year End

A proposal aimed at ensuring technology multinationals pay their fair share in tax was discussed by EU finance ministers last month, amid growing concern that corporations are benefiting from an outdated framework that fails to adequately deal with online businesses. Some countries would prefer to wait for an international approach rather than back an EU-only plan.

France is leading a push for the introduction of an EU tax on revenues of tech giants such as Amazon.com Inc. and Facebook Inc. until the world’s biggest economies can agree on a global system. Some EU governments are concerned that pushing ahead with such a levy -- which would target some of the biggest U.S. companies -- could exacerbate trans-Atlantic tensions.

“There is a long list of European countries in favor of digital taxation and there is a very short of countries against,” Le Maire said on Friday. “And there are also some countries asking technical questions.” Those technical questions include whether to link base erosion profit-shifting to digital taxation, Le Maire said.

The commission, the EU’s executive arm, presented a proposal in March for a targeted 3 percent levy on sales, which would increase the tax bill on large tech companies. The commission also put forward a longer-term approach that would enable countries to tax profits made in their territory even if the firm doesn’t have a physical presence there.

Tax proposals need the unanimous approval of all EU members before becoming law.

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