GAFA, four news letters

16/04/2019 in "Digital"
It is an acronym that has become unavoidable, in the space of a few months. GAFA, four letters to designate the "digital giants", that is to say Google, Apple, Facebook and Amazon. Names more than familiar in the digital age. While Europe is divided as to taxing them, France has decided to take the lead. So, what lies behind the famous GAFA tax? Response elements.

The first time there was a bill to tax the GAFA, it was in an interview with Bruno Le Maire for the Sunday newspaper at the end of January. The prime purpose of the Minister of the Economy is mainly to tax digital businesses, up to 3%of their turnover in France.

In fact, this mainly concerns American or Asian companies. More specifically, according to a report by LREM MP Benedicte Peyrol, we learn that the bill would concern "between 120 and 150 companies worldwide, of which about 50% American, 30% European, the rest being mainly Asia , especially China .

This project of taxing the now famous GAFA results, at the base, of an injustice. For Bruno Le Maire, there is a major problem, since the digital giants currently pay fourteen tax points less than European SMEs on French soil.

The project defended by the Minister of the Economy is therefore to defend smaller structures such as start-ups, which are not affected by taxation. Moreover, only one French company will really be targeted by this measure. It is Criteo , founded in 2005 by three French people, which employs 2700 people worldwide, for a turnover of 966 million dollars, excluding payments. Considered a nugget of the "French Tech" , Criteo specializes in personalized marketing from the data of Internet users, given their browsing history. With this company, we are fully in the case of advertising targeting, as well as in the case of the resale of personal data for advertising purposes, that the tax aims.

The link with advertising

Evoking the case of advertising with the example of Criteo goes without saying when we talk about GAFA taxation. Indeed, the advertising sectors, especially online, are really in the sights of the bill.

It will be a question of attacking those who sell data to third parties as well as those who practice intermediation, that is to say, marketplaces like Amazon.

Despite the arguments put forward by Bruno Le Maire, the draft law to tax GAFA is not shared with some other countries . If until now, we could see dissensions with some neighboring nations of the European Union, recently, the United States has entered the dance.

Chip Harper, head of the US Treasury for international tax issues, was in Paris and found Bruno Le Maire's bill "discriminatory".

The story could have stopped there but the United States threaten the Hexagon and the United Kingdom of a possible response if the two countries come to challenge international tax standards. Bluff or not, Chip Harper has nevertheless indicated that he could seize the OECD (Organization for Economic Cooperation and Development).

Questions around GAFAs do not seem ready to find answers any time soon.

Antoine Le Fur

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