France introduced the Digital Services Tax (DST) through Law No. 2019-759 on July 25, 2019, after failing to secure EU consensus on taxing digital giants. The tax ensures that large tech companies pay fairer taxes based on their activity in France. It applies to companies with global digital revenues over €750 million, including €25 million from France, and targets user-interaction platforms and targeted digital advertising. E-commerce resales and digital content delivery are excluded. The tax rate is 3% of gross annual revenue (excl. VAT) from taxable services in France, declared via the March CA3 VAT return and due by April 25. Monthly filers must also make two advance payments in March and September. The DST is intended as a temporary measure, to be withdrawn once OECD Pillar 1 is in place. Until then, it remains a tool to close digital tax gaps and support tax fairness.
France's Digital Services Tax: Key Details and Temporary Status
Public
France
Author: Ljubica Blagojević
Category:
Fiscal subject related
Views:
4249
Content accuracy validation date:
30.07.2025
Content accuracy validation time:
12:03h
Main Objectives and Context
- France originally pushed for an EU-level tax
- As consensus failed—largely due to tax unanimity rules—France acted unilaterally.
- The DST will be repealed once a global agreement (Pillar 1 of the OECD reform) is implemented. While Pillar 2 (global 15% minimum tax) has been adopted via the 2024 Finance Act in France, Pillar 1 remains pending.
Scope of the Tax
- Applies to companies—regardless of domicile—whose global taxable digital revenues exceed €750 million, and at least €25 million generated in France.
- Thresholds are assessed at group level, including related entities.
- Two service categories are taxed:
- Digital platforms enabling user interaction, like online marketplaces.
- Targeted digital advertising services based on user data.
- Exemptions: traditional e-commerce (resale model) and digital content delivery.
Tax Rate and Collection
- The DST is 3% of annual gross (excl. VAT) revenue from taxable services in France.
- It is reported via the March CA3 VAT return and payable by April 25 of the following year.
- Payment rules:
- Simplified VAT regime filers: declare on CA12, no advance payments.
- Monthly CA3 filers: must pay two installments:
- 1st in March, alongside the final balance for the prior year.
- 2nd in September.
France’s DST is a transitional measure aimed at pressuring global agreement on digital taxation while ensuring immediate revenue from major tech firms profiting from the French digital market. The tax is narrowly targeted, administratively integrated with existing VAT procedures, and meant to be temporary, pending OECD reforms. However, until Pillar 1 is implemented, the DST remains a key national tool for addressing digital tax gaps and leveling the playing field for domestic businesses.
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