France to levy digital service tax as a first country after Italy to do so

Over the past months, France has shown keen intentions to introduce Digital Service Tax. French authorities created a framework, but due to some delays, Italy overtook them and became the first country that introduced a Digital Service Tax (DST).

Digital Service Tax (DST) will be payable at a rate of 3% on the gross revenues received by the companies in the digital sector, resulting from the provision in France during the calendar year. This sort of tax will be mandatory for all multi-national companies which provide one of the following services on the territory of France:

  1. Digital content,
  2. Communication services or
  3. Payment services.

As described in the draft of DST regulations, this sort of tax will be payable by all taxable persons/businesses that, individually or group-wide have (a) a total worldwide revenue higher than EUR 750 million and (b) revenues obtained from the digital services in France higher than EUR 25 million during the calendar year must pay Digital Service Tax.

Unlike Italy who introduced Digital Service Tax, France is more cautious due to strong opposition from the home-countries of the world’s tech giants, such as United States of America who already announced countermeasures for France in case of adoption of Digital Service Tax. The last news from the financial industry says that the adoption of this sort of tax in France is postponed until all parties find a common interest in its adoption.

It remains to be seen what will happen with the adoption of the Digital Service Tax in France in the upcoming month, but due to the last rumors, its adoption is expected in France from 2021.