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France and Germany have come up with a compromise for a digital tax of the European Union (EU), abandoning a 3% large-scale tax on revenues generated by ad sales in the digital economy. According to Financial Times (FT), the new version is aimed at technology giants like Facebook and Google through their advertising sales. However, officials noted that other retailers like Amazon, Airbnb and Spotify would probably be excluded.
This tax replaces the original plan that would have sent about 180 of the largest technology groups acquiring activities such as the sale of data, estimating an estimated amount of 5 billion euros (569 million dollars a year). The move to focus exclusively on advertising comes after the German concerns that the car companies of the country could be affected by the tax, as well as the opposition of the Nordic economies that have drawn attention to wider international rules.
Since tax issues require unanimous agreement from all EU governments, the Franco-German compromise is urging finance ministers to approve the project "without delay and, in any case, before March 2019 . " It was designed to come into force in 2021 if a global solution to the OECD has not been agreed since then.
At the beginning of this month, French Minister for Economic Affairs and Finance, Bruno Le Maire, asked for the approval of the digital tax plan by the end of the year, saying that long would have been considered a "political failure".
"We want to adopt the Digital Taxation Directive by the end of this year, which is a clear red line for the French government," Le Maire told reporters in Brussels. "We are aware that there are some technical problems … but these are technical problems, not political problems, so we still have three or four weeks before the next Ecofin (a regular meeting between EU finance ministers) to resolve these technical problems ".
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