France now has the answer to ‘big sales, no profits’ puzzle of digital giants like Google, Amazon

France has enacted legislation to tax digital giants like Amazon and Facebook on their revenue, not profits. India — which levies a 6% tax on the ad spends of Google and other tech companies — needs to go the same way, eventually, though not immediately. This is essential to tackle the completely new phenomenon of digital companies that can show massive sales, but no profits, in many countries they serve.

Defying threats from US President Donald Trump about retaliation against a measure that “unfairly targets American companies”, France has levied a 3% tax on the revenues of 30 digital companies, mostly US-owned, with a global turnover of over 750 million euro and a French turnover of over ¤25 million. This will raise a tidy 500 million euro of revenue.