July 31, 2021

Taxation of multinationals: Bercy’s optimism

Several billion euros for France… or not. On paper, the G7 agreement concluded on the weekend of June 5 and 6 and which aims to further tax multinationals accused of seeking to avoid tax through optimization packages, should bring big returns to the budget of the state. The Minister of Economy and Finance, Bruno Le Maire, interviewed Sunday by Europe 1-CNews-The echoes, has also spoken of recipes to come from “Several billion euros across France”. An unexpected windfall at the end of the crisis, while public finances are drained. But already, the estimate is debated. In particular concerning the digital giants, which have been in the sights of France since it targeted them with a specific tax that entered into force in 2019.

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France is concerned by the two aspects of the reform: the first aims to better distribute the tax paid by the largest multinationals – particularly those in the digital sector – between their country of origin and those where their consumers are. The second proposes the establishment of a minimum tax of 15% at the global level weighing on a higher number of companies, a potentially very powerful tool to bring money into the coffers of the States.

“We’re shouting victory a little too quickly”

In fact, estimates of the additional tax revenue for France diverge. Bruno Le Maire affirms that the first part would bring in more to France than “The 400 million euros that we receive with the national tax” on the turnover of digital companies. “It can be between 500 million euros and one billion euros” per year, he said.

The 15% minimum tax would, on the other hand, generate much larger sums: “The base is much broader because it affects a very large number of companies. We are on several tens of billions of euros at the European level and several billion euros at the level of France “, added Mr. Le Maire.

Read our survey: What Europe could gain from a minimum tax rate on multinationals

As the details of these two components have not yet been finalized, it is difficult to put forward a precise and reliable costing. But not all estimates are as optimistic as those of the minister. “It’s very good to fight against tax havens, it’s virtuous, but we are shouting victory a little quickly”, tempers a tax specialist. Concerning the first “pillar”, which aims to reallocate the tax paid by multinationals between the countries where they have their headquarters and those in which their consumers live, the budgetary impact for France should in reality be marginal. Only a handful of very large companies are affected – the list is not yet known.

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