TechDigits

Tech news
Thursday, Jun 08, 2023

France’s digital taxman goes after Amazon — again

France’s digital taxman goes after Amazon — again

The US tech giant scored a victory narrowing a French digital levy that lawmakers are now trying to overturn.

Amazon won a key battle against France’s digital tax earlier this year. Now, the country’s taxman is out for revenge.

France's digital tax was announced with much fanfare in 2019 as a way of netting revenue from Big Tech platforms. But Amazon has since scored a major success that has narrowed the levy's scope, according to a previously unreported decision from the French top administrative court in March.

While the tax still targets online marketplaces and advertising, the Council of State ruled that other activities such as online multiplayer games and services between two companies of the same group should be left out — unlike what France's tax authorities had written in their guidelines.

Now, the Senate is trying — with the government’s backing — to make up for it through amendments voted over the November 19-20 weekend in parliamentary discussions on France’s 2023 budget.

"Few people noticed the [March] decision, which is quite technical," said Laurence Mazevet, tax partner at KPMG Avocats. "We expected the tax authorities to seek to change the law, because the Council of State's decision minimizes the levy’s impact.”

The digital tax targets companies with an annual global turnover of €750 million and at least €25 million in France. This covers, among other companies, Google, Facebook, Apple and Amazon, and the French government expects the tax to bring €670 million to public coffers in 2023. Paris has pledged to scrap its national levy as soon as a global deal on the taxation of corporate giants actually becomes reality, which is happening very slowly.

In France, Amazon was one of the staunchest opponents to the national scheme and the first tech company to announce it would pass on the costs to sellers.


Three wins


In 2021, Amazon challenged the tax authorities' guidelines on the digital levy, arguing that they go beyond the law. Administrative guidelines on taxes provide further explanation on legislation but can be brought before the Council of State when taxpayers deem them unfavorable.

While it's unclear how much money Amazon has saved or will save, the administrative court's decision is a political victory for the U.S. tech giant.

"There are three issues on which Amazon won. Each time, it was because the tax authorities had misinterpreted the law," said Edouard Milhac, an associate at CMS Francis Lefebvre Avocats.

The top administrative court effectively reduced the tax's scope and required the French economy ministry to pay Amazon €3,000 in compensation.

The ruling is also a pleasant surprise for companies such as Epic Games. The top court said the tax shouldn't cover online multiplayer games. Intermediation services provided by companies of the same group shouldn't either. And it limits the tax base by cutting out logistic services provided by online marketplaces.

Tax lawyers Milhac and Mazevet said the decision opens the door for claims from companies who overpaid from 2019 to 2021. Amazon did not say whether it had followed the administrative guidelines and would seek reimbursement.

An Amazon spokesperson referred POLITICO to a March 2022 statement saying the Council of State’s decision "confirms that the interpretation by the French tax authorities goes far beyond the scope and intent of French law."

“Amazon pays all the taxes that it is required to pay in France," the statement continues, estimating the company's contribution in France at more than €1 billion in 2021 in direct and indirect taxes.


Two losses


The Council of State's decision did not fall on deaf ears. Over the weekend, the Senate quietly adopted an amendment to the French 2023 budget that overturns two of Amazon’s wins.

The proposal drafted by the budget’s rapporteur — Jean-François Husson from the conservative party Les Républicains — enshrines in the law the inclusion of multiplayer games and intra-group services when they are also provided to external companies. However, senators didn't add revenue from logistics to the tax base.

The amendment, which would come into force on December 31, is likely to impact companies beyond Amazon.

Husson and government spokespeople did not reply to multiple requests for comment. The tax authority declined to comment.

The Senate moved to expand the levy with the government's blessing. “This amendment is a timely clarification of the digital tax’s conditions of application,” Industry Junior Minister Roland Lescure told lawmakers ahead of the vote.

The budget still needs to go back to the National Assembly, but the government's backing means the Senate's amendments will likely be in the final text.

Lawmakers wanted to “clarify the law,” the Senate official said; “the digital tax was always meant to be extended.”

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

TechDigits
Close
0:00
0:00
Nvidia Joins Tech Giants as First Chipmaker to Reach $1 Trillion Valuation
AI ‘extinction’ should be same priority as nuclear war – experts
Prominent Hacker Forum RaidForums Suffers Substantial Data Breach
Nvidia CEO Huang says firms, individuals without AI expertise will be left behind
WPP Revolutionizes Advertising with NVIDIA's AI Powerhouse
TikTok Sues Montana Over Law Banning the App
Mobile phone giant Vodafone to cut 11,000 jobs globally over three years as new boss says its performance not good enough
Warren Buffett Sells TSMC Shares Over Concerns About Taiwan's Stability
'Godfather Of AI' Geoffrey Hinton Quits Google To Warn Of The Tech's Dangers
Vermont Man Charged with Stalking After Secretly Tracking Woman with Apple AirTag
Elon Musk Statements About Tesla Autopilot Could Be 'Deepfakes,' Lawyers Claim. Judge Evette Pennypacker Does Not Understand How Far and Advanced This Technology Became
AT&T's Successful Test of Satellite-Based Phone Call Raises Possibility of Widespread Coverage
Pulitzer Prize-winning journalist Seymour Hersh slams New York Times' pro-government stance and treatment of sources
Fox News Settles their case with Dominion Voting Systems for a staggering $787.5 MILLION
The G-7 aims to make global crypto regulations tougher
China and Brazil have signed a new deal that will allow them to trade in their own currencies, bypassing the US dollar as an intermediary
Elon Musk and Others Call for Pause on A.I., Citing ‘Profound Risks to Society’
U.S. charges FTX's Bankman-Fried with paying $40 million bribe
Fallen 'Crypto King' Who Owes Millions to Investors Was Kidnapped and Tortured
Regulators blame social media for SVB's rapid collapse: 'Complete game changer'
AOC explains why she opposes banning TikTok
Gordon Moore, a co-founder of Intel Corporation, died at 94
Donald Trump arrested – Twitter goes wild with doctored pictures
Credit Suisse's Scandalous History Resulted in an Obvious Collapse - It's time for regulators who fail to do their job to be held accountable and serve as an example by being behind bars.
Russian Hackers Preparing New Cyber Assault Against Ukraine
A brief banking situation report
Elon Musk Is Planning To Build A Town In Texas For His Employees
The Silicon Valley Bank’s collapse effect is spreading around the world, affecting startup companies across the globe
Market Chaos as USDC Loses Peg to USD after $3.3 Billion Reserves Held by Silicon Valley Bank Closed.
Banking regulators close SVB, the largest bank failure since the financial crisis
In a major snub to Downing Street's Silicon Valley dreams, UK chip giant Arm has dealt a serious blow to the government's economic strategy by opting for a US listing
It's the question on everyone's lips: could a four-day workweek be the future of employment?
Corruption and Influence Buying Uncovered in International Mainstream Media: Investigation Reveals Growing Disinformation Mercenaries
Being a Tiktoker might be expensive…
China's top tech firms, including Alibaba, Tencent, Baidu, NetEase, and JD.com, are developing their own versions of Open AI's AI-powered chatbot, ChatGPT
This shocking picture, showing how terrible is the results of the earthquake in Turkey
The desk of King Carlos Alberto of Sardinia has many secret compartments
Charlie Munger, calls for a ban on cryptocurrencies in the US, following China's lead
First generation unopened iPhone set to fetch more than $50,000 at auction.
Almost 30% of professionals say they've tried ChatGPT at work
Interpol seeks woman who ran elaborate exam cheating scam in Singapore
What is ChatGPT?
Tesla reported record profits and record revenues for 2022
Microsoft is finalising plans to become the latest technology giant to reduce its workforce during a global economic slowdown
Tesla slashes prices globally by as much as 20 percent
After Failing To Pay Office Rent, Twitter May Sell User Names
FTX fraud investigators are digging deeper into Sam Bankman-Fried's inner circle – and reportedly have ex-engineer Nishad Singh in their sights
TikTok CEO Plans to Meet European Union Regulators
U.S. Moves to Seize Robinhood Shares, Silvergate Accounts Tied to FTX
Coinbase to Pay $100 Million in Settlement With New York Regulator
×