Digital Services Tax

In 2019 France introduced a Digital Services Tax (DST), which imposes a three per cent tax on the French revenue of large multinationals that provide digital advertising and digital platform services. The charge applies to companies with worldwide revenue of €750 million and digital services revenue generated by French consumers greater than €25 million pa. The DST applies to thirty companies worldwide, and in 2023 generated €670 million a year in taxes, mainly from Google, Amazon, Uber, and Facebook.

For the French DST, the taxable digital services include:

• Intermediation services, i.e. the supply, through electronic means, of a digital interface that enables users to interact with each other to exchange goods or services; and
• Targeted advertising services based on user data. These advertising services include purchasing, storing, and distributing advertising messages, advertising control, performance measurement, and the sale of users’ data.

France’s DST attempts to tax the digital economy serving French citizens. Taxing the digital economy is difficult as large tech companies facilitate, or provide, services in one location but recognize the revenue from that transaction for tax purposes in another place (usually with low tax rates). DSTs also apply in India, Hungry, Belgium, the Czech Republic, Spain and the United Kingdom.