France says to target Airbnb ‘unacceptable’ tax regime

Airbnb's business model allowed it to accumulate the same amount of rooms as the Hilton chain in just a few years. It took Hilton nearly a century to do the same. [Grid Scheduler/ Flickr]

France said on Wednesday (9 August) it would team up with Germany to address an “unacceptable” tax situation for homesharing website Airbnb and other digital platforms like Google and Amazon.

“These digital platforms make tens of millions of sales and the French Treasury gets a few tens of thousands,” Economy Minister Bruno Le Maire told parliament, adding this was “unacceptable”.

Le Maire said France and Germany would come up with a joint plan to fix the situation by mid-September.

French newspaper Le Parisien reported on Monday that Airbnb paid less than €100,000 in French taxes last year when more than 10 million French people used the site.

“Airbnb has the right to operate in France. But we have the right to demand from Airbnb and all the other digital platforms a fair contribution to the French treasury,” Le Maire said.

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Ongoing moves by the EU Commission and the OECD to address the tax question were “taking too much time, it’s all too complicated”, he said.

France and Germany were therefore going to submit a tax proposal at the next EU ministerial council on 15 September.

According to Le Maire’s staff, the two countries will add to the meeting’s agenda a draft text on the taxation of digital platforms.

“We want this to become a European Commission proposal which will should be studied by European leaders at the European Council in December,” he said.

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Many digital platforms operating in the EU are based in Ireland, which offers a low corporate tax regime, allowing internet giants to escape a higher tax rate in other member countries.

Other web giants like Google, Amazon and Facebook would also be included in the initiative, Le Maire said. “Everybody has to pay a fair contribution,” he said.

Le Maire’s comments came a day after EU Economics Commissioner Pierre Moscovici said Airbnb should pay its fair share of taxes in France, as should footballer Neymar who recently transferred to French club PSG in a record deal.

Airbnb and other sites paid too little French tax, Moscovici told RTL radio. “That is wrong, it’s shocking,” he said.

This is the latest in a string of attempts by the EU and national governments to force operators in the sharing economy to pay their fair share of taxes and social contributions.

Controversial ride-hailing app Uber has shaken up the transport market by undercutting traditional taxi services. Opponents claim it undermines the jobs of licenced taxi drivers, whose services cost more because they pay full tax and social security contributions. Following a July European Court ruling, EU countries have the right to ban Uber within their territories.

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