France slams Silicon Valley for skirting tax in Europe

Big EU countries have become increasingly frustrated that internet giants such as Amazon, Apple, Facebook and Google escape paying a fair tax by basing their operations in lower-tax EU states such as Ireland and Luxembourg.

“We need to make sure in Europe that all companies are paying their fair share of tax, that is the meaning of our initiative,” Le Maire told reporters on the sidelines of talks with his EU counterparts in Tallinn, Estonia.

“You know that this is not the case. That huge companies, huge internet companies are not paying a fair contribution to Europe.”

Le Maire said he would formally unveil his proposal on Saturday to reverse the problem.

The plan already has the formal backing of Germany, Spain and Italy with Bulgaria, Austria, Greece and Latvia also ready to come on board.

Le Maire said this reform would ensure that internet giants pay tax where they earn revenue, instead of on profits booked in their EU member state headquarters of choice.

“Our proposal is simple. It is to tax the turnover at member state level of the largest internet companies,” he said.

European regulators have become increasingly aggressive against US technology giants seen by officials as gaining too much power, with Amazon and Apple also facing scrutiny.

Le Maire insisted that his initiative was in no way anti-American and would not punish innovation.

“Of course we welcome these companies in France and in Europe,” he said. “They are essential for innovation, essential for competition or jobs.”

Le Maire’s proposal comes after Google recently escaped a 1.115 billion euro ($1.33 billion) tax bill sought by the French treasury, after a court upheld EU law, ruling that the US company’s Irish subsidiary was not taxable in France.

French President Emmanuel Macron promised to get tough on US internet giants during his election campaign, seeing their low tax rates as a source of resentment about globalisation and as unfair for European companies.