Declaration services: other indirect taxes
French digital services tax (“GAFA tax”): are you concerned?
Very large digital players earning revenue from users located in France may be subject to the digital services tax. Hanoutax analyses your situation and files your returns under a mandate.
What is the digital services tax?
Introduced by the law of 24 July 2019, the digital services tax (taxe sur les services numériques, TSN) is commonly called the “GAFA tax”. It applies to revenue earned in France from certain digital services supplied by very large companies. It does not replace VAT or corporate income tax: it comes on top of them.
Which services are covered?
According to the tax authority’s official presentation, three categories of services are concerned:
- intermediation services, meaning platforms connecting users;
- targeted advertising services based on user data;
- the sale of data collected about users for advertising purposes.
A company’s own online sales of goods or services are not, in principle, within these categories. The precise classification of each revenue stream should be documented.
Thresholds and calculation
Only groups exceeding two thresholds are liable: worldwide revenue and revenue generated in France, both from the covered services. According to the official impots.gouv.fr presentation, these thresholds are EUR 750 million worldwide and EUR 25 million in France. The rate originally indicated by the authority is 3%; since finance acts can change these parameters, we check the values in force for each period.
| Step | Question | Outcome |
|---|---|---|
| 1. Scope | Does your revenue come from one of the three covered services? | Yes or no |
| 2. Thresholds | Are the worldwide and French thresholds exceeded? | Liable or not |
| 3. Attribution | Which revenue is linked to users located in France? | Taxable base |
| 4. Calculation | Apply the rate to the taxable base. | Amount of tax |
Attributing revenue to France
This is the central technical point. Revenue is attributed to France according to the location of the users concerned (for example the user exposed to an advertisement, or the one using the platform). You need reliable data, a method that is consistent from year to year and documents that support it in case of audit.
How Hanoutax acts under a mandate
- analysing whether you fall within the tax (thresholds, nature of services);
- identifying and breaking down revenue attributable to France;
- calculating the tax and preparing the return;
- filing and tracking payment;
- documenting your revenue attribution method.
The mandate sets out the scope and the split of roles; see the guide to the power of attorney with the tax authorities. For platform activities, also read our article on marketplace VAT and platform liability.
Common mistakes
- confusing the DST with VAT on electronic services, which is a separate regime (see OSS and IOSS);
- testing the thresholds on the wrong revenue scope;
- not documenting the user-location method;
- forgetting that a group can centralise filings in one entity;
- not following changes in rate or thresholds.
FAQ
What is the “GAFA tax”?
It is the common name for the digital services tax, created in 2019, which targets very large digital companies.
What are the thresholds?
According to the official presentation, EUR 750 million worldwide revenue and EUR 25 million in France from the covered services; they may change, so we check current values.
Is my e-commerce business concerned?
In principle not for simply selling your own products; the tax targets intermediation, targeted advertising and data sales.
Must a group file several returns?
Not necessarily: related companies may designate one entity for filing and payment obligations.
Does the DST replace VAT?
No, it applies in addition to VAT and corporate income tax.
Can Hanoutax file my DST return?
Yes, under a written mandate, once your liability has been analysed and attribution data gathered.
Informational content, which does not constitute legal advice. The rules that apply depend on your situation.