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  • Google's headquarters in Mountain View, California, U.S., May 8, 2019.

    Google's headquarters in Mountain View, California, U.S., May 8, 2019. | Photo: Reuters

Published 4 July 2019

The GAFA tax will ensure that Google, Amazon, Facebook and Apple pay more taxes in France.

France's National Assembly approved Thursday a law to tax Google, Amazon, Facebook ​​​​and Apple, referred as GAFA law, which comes amid concerns that many of those tech companies avoid paying taxes as they make billions of dollars in annual income. 

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The GAFA tax, which was approved with 34 votes in favor and 13 abstentions, will be delivered to the country's Senate for approval on July 11 in order to become effective. 

The French Economy and Finance Minister Bruno Le Maire stressed that this tax is aligned with the proposal made by the Organization for Cooperation and Development (ODCE), which seeks to establish an international, common tax on digital big transnational companies from 2020.

The objective of the OCDE tax digital project is to ensure that large Internet-based multinationals pay more taxes in countries in which they actually operate and not only in those territories they choose as their headquarters because the fiscal conditions are more favorable.

At the Group of 7 (G7) meeting, which will be held in Chantilly (France) on July 17 and 18, the OECD countries' finance ministers and central banks directors will examine a new minimum appraisal system to fight tax evasion by large multinationals.

Currently, there is also a similar initiative in Spain, where the 2019-2022 Stability Program includes the "Google Tax", and fiscal instrument through which Prime Minister Pedro Sanchez expects to raise up to US$1.3 billion in taxes from tech multinationals such as Google or Amazon.

Digital giants "are becoming just as powerful as sovereign states," said Le Maire, who added that their regulation is essential since those multinational ​​​​​"only respond to private interests."

According to its original proposal, the GAFA tax would be applied starting Jan. 1, a decision through which President Emmanuel Macron expects to gather US$564 million in fiscal revenues.

In December 2018, Minister Le Maire pointed out that the GAFA tax would not only apply to digital tech giants but will extend to transactions related to "advertising revenue, platforms and resale of personal data," as local media 20 Minutes reported.

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