Jing Ji Guan Cha Wang·2025-12-08 09:38Core Viewpoint - The French government has adjusted the digital services tax (DST) rate from 3% to 6% and raised the global revenue threshold for taxation from €750 million to €2 billion, targeting large digital tech companies while aiming to address tax fairness and protect local interests [2][3]. Summary by Sections Tax Rate and Revenue - The adjustment of the DST is the first since its implementation in 2019, expected to generate increased revenue for the French treasury, with projected revenues of €700 million in 2023 and over €1 billion by 2025 [2][3]. - The tax will now apply to companies with global revenues exceeding €2 billion and digital revenues in France exceeding €25 million [2]. Impact on Companies - The new tax structure primarily affects large multinational internet giants, particularly from the U.S. and to a lesser extent from China, as many Chinese companies have limited market share in France [3][5]. - The adjustment is seen as a direct response to the challenges posed by U.S. tech companies that have historically utilized tax avoidance strategies [4][5]. International Context - France's digital tax initiative is closely linked to ongoing international tax reform discussions led by the OECD, particularly the stalled "Two-Pillar" framework aimed at addressing tax jurisdiction issues in the digital economy [7][8]. - The adjustment reflects France's frustration with the slow progress of OECD negotiations and aims to unilaterally enhance its tax revenue while addressing perceived inequities in the current tax system [9][10]. Economic Implications - The increase in the DST may lead to higher costs for consumers and businesses that rely on these digital platforms, as companies may pass on the tax burden [11][12]. - The adjustment could potentially create a ripple effect in the French economy, impacting local businesses and consumers who engage with these platforms [12].