December 3, 2019 / 2:13 PM / 9 days ago

Factbox: France and others plan tax clampdown on digital giants

PARIS (Reuters) - U.S. President Donald Trump’s administration threatened to impose duties of up to 100% on French imports worth $2.4 billion after it concluded a tax on digital services imposed by Paris would be “unusually burdensome” for U.S. technology companies.

Paris is not alone among capitals in Europe and beyond in proposing a tax on big tech firms. U.S. Trade Representative Robert Lighthizer said the government was exploring whether to open similar investigations into the digital services taxes of Austria, Italy and Turkey.

Here are some of the others:

BRITAIN

Prime Minister Boris Johnson is campaigning for a Dec. 12 general election on a pledge to make major multinational companies pay their fair share of tax, including the implementation of a Digital Services Tax.

From April 2020, the government will introduce a new 2% tax on the revenues of search engines, social media platforms and online marketplaces which derive value from British users, according to a July 2019 policy paper.

Companies will be liable when their worldwide revenues from digital activities are more than 500 million pounds ($641.50 million) and more than 25 million pounds of those revenues are derived from British users.

The opposition Labour Party’s manifesto makes no reference to a digital services tax.

SPAIN

Spain’s former Socialist-led government had approved a digital tax bill but it was shelved before being debated in parliament after a snap election was called in September.

The Socialist Party, which won the most votes in the Nov. 10 election, included the proposal for taxing large companies 3% of their digital revenues in its electoral program. But it is still unclear if the party will get enough support to form a government.

Socialist leader Pedro Sanchez has struck a coalition deal with the far-left Unidas Podemos party, which included in its electoral program a digital tax for companies with global revenues of at least 500 million euros or revenues in Spain of at least 3 million euros.

ITALY

Italy introduced a tax on “digital services” in the 2019 budget but never activated it. It is renewing the tax in its 2020 budget, which must be approved by parliament before the end of the year.

The 3% levy tax would apply to digital companies with annual revenues of not less than 750 million euros, of which at least 5.5 million euros is generated in Italy.

Unlike the 2019 digital tax, the 2020 levy would operate under a “self-assessment taxation regime” by which the companies submit a calculation of the amount owed. This means the tax becomes effective immediately in January and does not require implementing measures.

AUSTRIA

Austria increased in April the size of its planned tax targeting tech companies to 5% of their advertising revenue in the country from 3% percent previously.

The right-wing coalition government that put the plan together collapsed in May. It is unclear whether the next government will keep the plan, scrap it or change it.

TURKEY

Turkey’s parliament in November passed a 7.5% tax on digital advertising and content, part of a package to raise tax revenues.

CANADA

Canadian Prime Minister Justin Trudeau’s Liberal Party proposed a digital services tax during the Autumn election campaign.

The Liberals called for digital companies with worldwide revenues of at least C$1 billion and Canadian revenues of more than C$40 million to be subject to a new 3% tax on revenue generated through the sale of online ads and user data. The tax would take effect on April 1, 2020.

Trudeau won a second term but at the head of a minority government.

DENMARK

The leader of Denmark’s new Social Democratic government said last year when she was in opposition that she would implement a digital tax if elected.

Denmark’s former center-right government fought against an EU-wide digital tax, citing the likely loss of tax revenues.

AUSTRALIA

Earlier this year, Australia abandoned plans for a digital services tax, opting instead to wait for a global agreement on the best way to handle the taxing the revenues of tech giants.

PORTUGAL

Prime Minister Antonio Costa has defended the need for “taxation of digital giants, who generate very large revenues in the European Union space and who either rigorously pay no taxes or pay very few taxes” in the EU.

His minority government, re-elected in October, is still preparing the State Budget for 2020. It is unclear if it will unilaterally introduce taxation on digital platforms in 2020 or wait for a coordinated European action.

($1 = 0.7794 pounds)

Compiled by Richard Lough; Reporting by Reuters bureaus; Editing by Catherine Evans

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