On 6 March 2019, the French Minister of Economy and Finance, Bruno Le Maire, presented the draft bill on the taxation of large digital companies, which also includes a change in the corporate tax rate for large companies.

The first part of the bill provides for the introduction of a new digital services tax (DST), which is in line with previous announcements including a 3% tax on the revenue of large digital companies from targeted online advertising, the sale of collected user data for advertising purposes, and intermediation services ({News-2019-03-04/P/3-previous coverage}). The DST would be deductible for corporate tax purposes, with taxpayers required to make two DST installments during the year in April and October (one installment in October for 2019).

The second part of the draft bill would partially reverse the reduction of corporate tax rates, which for 2019 are 28% on taxable income up to EUR 500,000 and 31% on the amounts exceeding that threshold. Instead of the 31% rate, companies with turnover exceeding EUR 250 million would be subject to a 33.33% rate on taxable income exceeding EUR 500,000 (i.e., the 2018 rates would be retained for such companies).

Click the following for the speech on the bill by Minister Le Maire and a related release. Subject to approval, both measures are to apply from 1 January 2019.