France has resumed the collection of a digital services tax from major tech companies such after pausing the levy earlier this year, according to a new report.

An unnamed French official cited by the Wall Street Journal this morning said that the tax, which stands at 3%, is now once again in effect. The tax is levied on revenues generated in France from certain types of digital services. It applies to large tech companies such as Google LLC and Facebook Inc. that have annual sales of at least €25 million, or about $30 million, in France and at least €750 million or about $921 million globally.

The official who spoke to the Journal said the tax brought in a total of €400 million across the country during 2019. The figure for 2020 is reportedly expected to be higher. 

France is among a lengthy list of nations that have implemented or are moving to implement taxes on large tech industry players. Austria introduced a 5% digital tax at the start of 2020, while the U.K. in April introduced a 2% levy on the revenues that search engines, social media platforms and online marketplaces generate from local users. Spain, meanwhile, is moving ahead with plans to implement a similar 3% digital services tax on Jan. 16.

The developments have drawn a response from the U.S., where many of the tech giants to which the new taxes apply are based. U.S. officials are expected to next week implement $1.3 billion worth of tariffs on cosmetics and handbags from France. The import duties were originally set to go into effect in early 2020 but were suspended as part of an agreement with France that also led to the digital tax being put on pause.

U.S. officials also are said to be pursuing investigations into digital service tax policies elsewhere that could lead to the implementation of tariffs on imports from the U.K., Italy, India, Spain and six other countries.

The worldwide legislative efforts to require tech giants to pay more taxes come as the Organization for Economic Cooperation and Development works on a set of cross-border tax rules for the digital economy. The talks involve more than 100 countries. The OECD, which is hoping to reach an agreement by mid-2021, has among other things floated the idea of implementing a global minimum tax on certain digital services.

Photo: Unsplash