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Amazon to pass cost of France’s new digital tax on to French clients

Amazon to pass cost of France’s new digital tax on to French clients

Amazon plans to pass on the costs of France’s new digital tax on internet giants to the businesses that use its Marketplace platform for finding customers, instead of taking the hit itself, the US online retailer said Thursday.

The levy, approved last month, put France at the vanguard of countries seeking to force big technology firms to pay more in the markets where they operate — but has garnered threats of retaliation from US officials.

Applied retroactively from January 1, it sets a three percent levy on the profits from providing online sales for third-party retailers, as well as on digital advertising and the sale of private data.

“As we operate in the very competitive and low-margin retailing sector, and invest massively in creating new tools and services for our clients and vendor partners, we cannot withstand an additional tax,” the company told AFP in a statement.

“This could put smaller French firms at a competitive disadvantage to their peers in other countries, and like many others, we have alerted the authorities,” it said.

French President Emmanuel Macron’s government went ahead with the so-called GAFA tax an acronym for Google, Apple, Facebook and Amazon after failing to secure an EU accord on how to plug what it considers a fiscal loophole.

American internet heavyweights often route their EU profits to member states with low corporate taxes such as Ireland or Luxembourg, allowing them to pay next to nothing in countries where they make huge profits.