France Signals Progress Toward EU Tax on Global Technology Firms

French Finance Minister Bruno Le Maire signaled that support is growing for a EU plan to tax the revenue of large technology companies, according to Bloomberg.

Le Maire suggested adding a "sunset" clause that would allow the European Commission’s planned revenue tax to be automatically phased out once a global scheme is ready. The proposal, at a meeting of EU finance ministers in Vienna, aims to assuage concerns by countries including Ireland over the wisdom of the bloc going it alone given the global nature of digital services.

"Lots of countries have changed their position," Le Maire said, highlighting what he called "constructive" statements from the U.K., the Netherlands and Luxembourg. "Compared to our previous meeting, when things were very difficult, we are making progress." Austrian Finance Minister Hartwig Loeger said European countries would work intensively on the technicalities of the tax with the aim of getting an agreement by the end of the year.

Le Maire is raising pressure on his European peers to move ahead with the duty, warning that voters would punish them at EU elections in May if they don’t act. Europeans can’t understand why tech giants pay lower tax rates than small companies based on European soil, he said.

France is pushing for a rapid introduction of an EU tax on revenues of large tech firms until the world’s wealthiest nations can agree on a global system for better taxing such firms. Any tax proposal will need the unanimous approval of all EU members before becoming law, meaning a single country could block it.

Some countries are worried pushing ahead with such a tax, which would target some of the biggest U.S. companies, could exacerbate trans-Atlantic trade tensions. Germany, which exports more to the U.S. than any other EU country, would stand to lose the most in the case of an escalating trade war. Germany, originally a strong proponent of the plan, is concerned about the technical challenges of implementing digital taxation.