(ATR | Andreas Hellmann & Kevin Adams) - Last week the Senate of France reached a compromise with the legislature’s lower chamber, the National Assembly, on its version of a digital services tax (DST). This unilateral move from France comes after the European Union (EU) wasn’t able to agree on its own DST proposal that would have applied in all EU member states.
The main point of contention between the Senate and the National Assembly revolved around the concept of state aid. Under Article 107 of the Treaty on the Functioning of the European Union, a member state may not grant state aid or use state resources to distort competition or trade-in the EU marketplace. There are certain exceptions to this standard, but to meet these exceptions a government must notify the European Commission and await its notification before implementation of any proposed law.
The French Senate introduced language into the bill passed by the National Assembly that would “oblige the government to give Parliament the reasons for its refusal to notify the digital services tax to the European Commission as state aid.” This language was ultimately adopted in the compromise bill. ....continues.