GAFA
Definition: GAFA
The term GAFA is used to refer to the tech giants. Behind this acronym are Google, Apple, Facebook, and Amazon, which alone had a combined market capitalization of $3.441 trillion in August 2018—nearly half that of the 300 leading companies in the eurozone, which are worth $6.69 trillion.
This group of four, also known as the Big Four, Microsoft is often added, turning GAFA into GAFAM.
But GAFA isn’t the only acronym; there’s also NATU (Netflix, Airbnb, Tesla, Uber) and BATX in China (Baidu, Alibaba, Tencent, Xiaomi)
The GAFA Companies at the Center of Tax News
Throughout 2018, the GAFA companies have been at the center of public debate. Although they generate substantial revenue in Europe, these companies currently pay little or notaxes.
In March 2018, the European Commission proposed a tax of 3% of these tech giants’ revenue to curb tax evasion. To date, among the 27 member states, only Francehas said it is ready to implement the tax as early as January 1, 2019, pending the establishment of a global solution. In fact, according to Bruno Le Maire, this tax would generate nearly 500 million euros, as it targets, among other things, advertising revenue and the resale of personal data.
Elsewhere in the world, the United Kingdom and Singapore have already implemented tax rules targeting GAFA, and similar initiatives are underway in Italy and Spain.