France and Germany abandon EU digital tax – The Economic Journal

France and Germany abandon EU digital tax - The Economic Journal

France and Germany have abandoned plans by the European Union to impose a new digital tax on technology companies in order to restrict advertising sales that would likely exclude giants like Amazon and Apple.

The news is advanced by the "Financial Times" on Tuesday, which also reports that the two countries will present this Thursday a new rate of 3% on the revenues generated by advertising sales in the digital economy to the 28 EU members.

With this document, the collection of taxes on the revenues from the sale of data and the activities of the platforms is excluded. Amazon and Apple are expected to be the companies that remain outside the charge of this fee, contrary to what was foreseen in the initial proposal, according to Brussels officials.

This amendment should also benefit German car companies, which could be affected by this measure.

The new agreement leaves behind a broader, three-dimensional digital tax plan, which would also target around 180 of the largest technology groups, recording activities such as data sales and online platform activities, raising about 5 billion euros per year.

Under the new Franco-German version, the likes of Facebook and Google would be the main target for sales, but other retailers such as Amazon, AirBnB and Spotify would be excluded, officials said.

The technology giants are currently paying a 9.5% tax, less than half of what traditional companies pay, which is around 23%, a situation that has generated protests in countries like France or Germany, which have been in favor of heavier taxes.

Now it is precisely these countries that want to change the original proposal. For the Brussels proposal to move forward, it will have to overcome a number of obstacles: obtaining the green light from the Council and the European Parliament, as well as from the 28 EU countries.

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