It was announced overnight the French parliament had approved the ‘GAFA’ (Google, Apple, Facebook, Amazon) tax, a three per cent levy on revenue made by these companies.
So are we likely to see similar changes here in Australia?
University of Sydney Business School associate professor Shumi Akhtar told B&T the government “has been working on tax requirements” for these tech giants.
For the year ending December 31, Google had a corporate tax expense of $26.5 million in Australia, and Facebook paid $11.8 million.
These same companies’ financials show Australians paid Google $4.3 billion and Facebook more than half a billion dollars for services in the same period.
“There is not a concrete set of tax rules set out yet to apply uniformly to tech giants,” said Akhtar.
“This definitely has influenced how the public sees these companies.”
She is calling for a “fair but ‘tailored’ tax system” to bring local businesses on an even playing field with these tech giants.
“One size fits all won’t work anymore for every corporation because of their operational activities and risk profile,” Akhtar said.
“This is especially important for companies that have a monopoly, because of their sheer size and market share.
“These companies need to be closely monitored and have a tailored tax policy so that other companies are treated fairly and at the same time they [large tech companies] pay a fair share of tax.”
Digital Industry Group Inc. (DIGI) – which advocates for Google, Facebook, Twitter, Amazon and Verizon Media in Australia – chose not to comment on Professor Akhtar’s suggestions.
If Australia was to impose any significant changes, it could expect a similar reaction to the one France has so far received – namely American outrage.
Donald Trump has already launched an investigation into the move, with the suggestion the legislation is “discriminatory” against these US companies.
There are concerns this investigation could result in the US imposing tariffs or other trade restrictions on France.
French finance minister Bruno Le Maire said: “Between allies, I believe we can and must resolve our differences in another way than through threats.”
“France is a sovereign country, its decisions on tax matters are sovereign and will continue to be sovereign.”