New study: French consumers and firms will pay most of French digital tax

The costs of a digital tax would mostly be borne by consumers and businesses that use digital marketplaces – not large tech companies, concludes a new study from Taj/Deloitte.

The economic impact assessment published today, finds that 55% of the proposed tax would be passed on to French consumers and 40% to companies that use online services. Only 5% would be paid by the tech giants targeted.

French Finance Minister, Bruno Le Maire, has repeatedly promised that “no individual and no service user will be affected” by his so-called “GAFA” tax.

The new study also finds that the total additional tax burden would be roughly €570 million in 2019 – almost 50% higher than the actual tax revenue raised.

The administration of the new tax would finally be challenging for the French tax administration. The report expects “very high administrative costs” and warns that it “could be challenged by taxpayers” which questions its enforceability.

While a consensus on global tax reform is expected to be reached next year France could be the first EU country to implement such digital tax. The tax proposal was presented on March 6 and will be discussed in the National Assembly on April 8. Minister Le Maire wants the tax applied retroactively from January 1, 2019.

Taj/Deloitte was asked by CCIA to conduct this independent economic impact assessment.