By Vincent Renoux, Partner
Excerpt from the article, published on September 5 by Option Droit & Affaires
The inclusive framework of the global forum, in order to respond to the challenges raised by the “digitalization of the economy”, proposes a 2-pillar solution.
Two pillars to respond to the risk of loss of state tax revenue.
Pillar 2, now known as establishing a principle of "global minimum tax" at 15%, actually aims to tax in France profits that are too lightly taxed outside France (or transferred out of France to be taxed there too lightly) .
But the other challenge for the State is to succeed in taxing the activities carried out in France by foreign groups both to reduce its budget deficit and to restore a competitive balance between French groups and foreign groups.
This is what the tax administration strives to do in its audits, without its practice of rectifications in this area failing to determine a very clear guideline.
Pillar 1 responds to this expectation of the State much better than the so-called “GAFA” tax which in reality affects all players in the digital economy, including those who normally pay taxes in France or in Europe. Pillar 1 concerns not only digital activities, but also all other B to B activities (luxury, automotive, consumer goods, etc.).
Only extractive activities and financial activities are excluded.
