French economy minister says the country will introduce its own digital tax, dubbed “GAFA tax”, on large internet and technology companies from January 1
In early December, Economy Minister Bruno Le Maire said France would give the EU until March to come up with a deal on taxing US internet giants.
Context & Ripple Effects
This announcement is the unilateral turn in a two-year push by Bruno Le Maire: he first demanded an EU proposal for a 2–6% tax on big tech's European revenues, then set a March deadline for an EU-wide deal before acting alone. The 'GAFA tax' is France's answer to its own ultimatum — taxing large internet companies domestically if Brussels cannot.
The gamble paid off legislatively: France went on to unveil a 3% levy on companies with over €25M in French revenues, covering roughly 30 firms, and passed it into law within months. The story did not end there — lawmakers later voted to double the rate to 6%, against their own government's advice.
First-order effects
- Large internet and technology companies selling into France — the roughly 30 firms above the €25M French-revenue threshold later codified in law — face a new tax liability from January 1 rather than waiting for any EU agreement.
Second-order effects
- Le Maire's March deadline puts direct pressure on EU negotiators to deliver a bloc-wide deal, since a successful French tax gives every member state a template for going it alone.
Third-order effects
- If the pattern holds, digital services taxation becomes a national, escalating lever rather than a harmonized EU one — France's own later move to 6% shows unilateral rates ratchet upward once the precedent exists, with US retaliation as the standing counterweight.
The trend: Digital services taxation is shifting from stalled multilateral negotiation toward unilateral national levies that start modest and escalate once established.