May 18, 2021

France agrees with Germany to reduce the scope of the proposed digital rate

France agrees with Germany to reduce the scope of the proposed digital rate

France and Germany reached an agreement today on the tax on the Internet giants that foresees to reduce the scope of the initial proposal so that only serious billing for advertising services, while extending until March the deadline in which they expect to be approved by the Union European (EU).

The EU's finance and economic ministers will try to reach an agreement on Tuesday to adopt the digital rate that is far from being materialized, since unanimity is required from the 28 Member States but Ireland, Denmark, Sweden and Finland are opposed frontally.

Germany, which last year pushed the proposal alongside France, has taken a more ambiguous position in recent weeks, which is why French Economy Minister Bruno Le Maire was seeking an agreement with his German counterpart, Olaf Scholz, who Allow to continue advancing.

The agreement, embodied in a joint statement, calls on the European Commission and the Council to amend the proposal made so far for the rate to focus on online advertising, leaving out the services of intermediation between users and the sale of data from users

This was a demand from Berlin that, contrary to most EU partners, asked to get the sale of data out of the scope of the fee.

However, the Franco-German agreement states that the directive would not prevent States from adopting their own taxes at a national level on a broader basis.

The rate would be 3% of the turnover obtained by the aforementioned services and would affect Internet companies that bill more than 750 million euros worldwide and more than 50 million in the EU, as is now planned.

Regarding the adoption of the levy, Paris and Berlin urge to adopt the directive "without delay and in any case before March 2019 at the latest", but point out that this would only take effect on January 1, 2021 if by then A global solution has not been agreed within the framework of the OECD.

This link between the lack of a global solution and the entry into force of the European tax was already proposed at the last meeting of ministers in November, but it has not served to convince the opposition, which defend that the only effective response is to international level.

With the extension of the term until March, Paris renounces what had been its "red line", in the words of Le Maire, to have the rate approved before the end of the year.

Despite this agreement, the adoption of the tax requires unanimity, so it will not be possible to take it forward until the opponents overcome their reluctance.


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