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France Pioneers With New Big Tech Tax

Facebook protester with Warning Delete Facebook sign, Washington DC
Facebook protester with Warning Delete Facebook sign, Washington DC. April 2018. (Photo: Lorie Shaull)

“The anger is very real. Workers are taxed to the hilt. Why should large groups – Google, Amazon – be able to find a way round it?”

France is pioneering big tech regulation with a new 3% tax on giants like Facebook, Google and Amazon. All three tech giants currently evade taxes by setting up headquarters in low-tax E.U. countries like Ireland. France, which unsuccessfully sought to convince European partners to implement an E.U.-wide tax on tech giants, hopes to inspire other countries to follow suit as it placates yellow-vest protestors with the new policy.

French President Emmanuel Macron has struggled to pacify the yellow vest movement during his two years in office, as the protestors view the leader’s economic policies as disproportionately burdensome on lower socioeconomic classes.

A yellow vest protestor told the Guardian in April, “Tax in France isn’t fair. Several of my mates work at Amazon. How come low-paid workers, toiling all day in an Amazon hangar, have to pay all their tax and big companies get to arrange how to pay the least tax possible?”

Another yellow vest organizer echoed the sentiment, saying, “The anger is very real. Workers are taxed to the hilt. Why should large groups – Google, Amazon – be able to find a way round it?”

Under pressure from the social movement, France’s lower house of parliament approved the 3% tax on Thursday. It will be sent to the Senate next week, where its success is anticipated.

The bill will impact the French revenues of companies with global revenue above €750 million or French revenue above €25 million, according to the Associated Press.

The tech industry warns the bill may lead to higher costs for consumers. Amazon defended itself earlier in the year, arguing, “We pay the entirety of taxes required in France, as we do in all countries that we operate in,” and claiming it had employed 7,500 French workers and invested €2 billion in the country since 2010.

The complex corporate structures of the digital giants have allowed them to gain huge profits from major consumer economies like France, while drastically cutting taxes by moving revenues to low-tax countries.

Amazon, for example, has been criticized for transferring profits through Luxembourg, which gives tax breaks to foreign firms who base their operations in the country. The company also came under fire after some French employees said they were fired for showing support for the yellow vest protests on social media.

“This is a question of public liberty,” Avi Bitton, the lawyer for a worker fired by Amazon, told the Guardian. “Going on strike is a right in the French constitution, just like the freedom of speech. There was a national yellow vest movement, my client wanted to take part in it. Is he supposed to stay silent on that national movement just because he’s an Amazon employee?”

While other tax proposals are moving slower than France’s, the Organization for Economic Co-operation and Development (OECD), a collective of the world’s major economies, has been working to develop an international tax framework for big tech companies.

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Peter Castagno

Peter Castagno is a freelance writer with a Master’s degree in International Conflict Resolution. He has traveled throughout the Middle East and Latin America to gain firsthand insight in some of the world’s most troubled areas, and he plans on publishing his first book in 2019.

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