Sunday 20 January 2019 1:15 pm

EU digital tax could be agreed by March, says French finance minister Bruno Le Maire

Michael is a financial journalism student at City, University of London.

Michael is a financial journalism student at City, University of London.

The European Union could reach an agreement on details of a digital tax by the end of March, the French finance minister has said.

Talks among EU ministers aimed at aligning the taxation of online businesses broke down in December. A number of smaller member states, including Ireland, Sweden and Denmark, opposed the plan and voiced concerns that their economies would be disproportionately affected.

The UK has already struck out on its own in order to tax the tech giants, after the EU-wide approach was delayed.

Read more: EU leaders split on plans for a European digital tax

“We made a compromise offer to Germany in December and I am convinced that a deal is within arm’s reach between now and the end of March,” Bruno Le Maire told the Journal du Dimanche newspaper in an interview published on Sunday. “With the European elections just a few months away, our citizens would find it incomprehensible if we gave up on this.” 

The Organisation for Economic Co-operation and Development (OECD) is also working to establish an agreed international approach to the taxation of international tech companies.

The UK has already announced the introduction of a digital tax on online companies with revenues of over £500m.

Chancellor Philip Hammond said in his autumn budget speech that it was time for tech companies to pay their “fair share” and that the digital tax would raise £400m a year upon its introduction in April 2020. 

Read more: EU tech tax edging closer, says French finance minister 

Facebook’s accounts show that it incurred net corporation tax of just £7.4m in the UK last year, less than one per cent of its UK sales of £1.3bn.

Hammond also criticised progress on an international solution as “painfully slow”.