Tuesday, 16 July 2019
Latest news
Main » France's new green tax on air travel: will it be effective?

France's new green tax on air travel: will it be effective?

14 July 2019

The new French tax applies only to companies with a global turnover of more than €750 million and a national business in France exceeding €25 million, a bracket which also includes a handful of Chinese, British, German and Spanish retailers.

France is hoping for either one of two outcomes- that countries will either implement their own, independent taxes; or that this move gives momentum to calls for a multilateral agreement of how digital firms should be taxed globally.

She said that, in light of growing concerns about carbon emissions from trains, "France is committed to the taxation of air transport but there is an urgency here".

France passed a polarizing tax on "digital services" that will hit American tech's major players like Google, Facebook, and Amazon.

The national proposals come after an EU-wide effort to pass a digital tax on corporations failed a year ago, thanks to resistance from countries like Ireland and the Netherlands.

"We've got to find a way of taxing the internet giants on their income, because at the moment it is simply unfair", Johnson said earlier this month, according to Reuters.

The proposed 3% tax on French revenue of large internet companies is expected to pass the French Senate and could yield €500m (£450m) a year. These limits have been set to apply to companies with worldwide revenue in excess of £500 million of which in excess of £25 million is derived from United Kingdom customers.

Tech giants face payments in the tens of millions under the measure.

The French parliament has adopted a new tax targetting giant tech companies operating in the country, in defiance to a warning against the same by the United States of America.

But the lawmakers noted that France is a sovereign state which can not be dictated to how to operate and how to handle businesses taking part within its territories.

For comparison, Apple raked in more than $13 billion in sales in Europe in the first-quarter of the year, while Facebook's European revenues were $3.65 billion during that period.

Such a move is supported by Google which believes it would mean Silicon Valley tech giants would pay less tax in the United States and more in other jurisdictions, in a departure from the longstanding practice of paying most taxes in a company's home country.

Lighthizer's office said it had reason to believe that France was "unfairly targeting the tax" on U.S. companies.

But, she added, other countries are already looking at new taxes on big tech companies. The French government said that this is a temporary measure that will be applied until the European Union and wider world can reach an agreement on how to tax major tech companies more effectively.

France's new green tax on air travel: will it be effective?