France Proposes Doubling Digital Services Tax, Raising Threshold, Sparking Concerns Over High Effective Rates

France proposes doubling its digital services tax (DST) rate from 3% to 6%, with discussions of rates as high as 15%.
DSTs are levied on revenues, not profits, leading to extremely high effective tax rates, especially for companies with low profit margins (e.g., a 6% DST can mean a 60% effective tax rate for a 10% profit margin).
The proposal also raises the global revenue threshold for companies subject to the DST from €750 million to €2 billion, making the tax more discriminatory.
The DST is regressive, disproportionately impacting less profitable companies and could become confiscatory at higher rates.
The policy shift could have harmful consequences for all stakeholders involved.

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.