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Europe's Tech Tax Plan Limps on With Franco-German Agreement

  • A 3 percent levy on EU advertizing sales is proposed for 2021
  • Revised tech tax proposal excludes revenue from data sales
Tech Innovation At IFA Consumer Electronics Fair
Photographer: Krisztian Bocsi/Bloomberg
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Europe’s efforts to tax large tech companies were kept on life-support Tuesday as France and Germany proposed a final-hour compromise that scales back the broad plan initially envisioned by Paris.

The new proposal would only tax the European advertising revenue of digital companies at 3 percent, rather than a wider base encompassing data sales and marketplace sites. The duty would generate about half the revenue previously planned and mainly hit Alphabet Inc.’s Google and Facebook Inc., which dominate the online ad market, according to an official with knowledge of the matter.