Leboncoin Faces €39 Million Digital Services Tax Bill Despite Protestations

The Adevinta-owned French horizontal marketplace Leboncoin has been told to pay a tax adjustment of €39 million according to local publication l'Informé.

The hefty bill comes as a result of the French government's so-called GAFA/GAFAM tax introduced in 2019 which was designed to make big digital services companies such Google, Amazon and others pay their fair share. The tax specifically targets companies that have global revenues of over €750 million and French revenues of over €25 million in any of the categories below:

• online advertising
• selling user data for advertising purposes
• online intermediation

As part of Adevinta, which generated €1,644 million in revenue in FY22, Leboncoin is liable to pay 3% of its revenue to the French taxman.

Leboncoin is a marketplace that operates across many categories and is large enough to be considered a significant rival to France's leading real estate vertical, the AVIV Group-owned portal SeLoger.

The argument from Adevinta's side is that Leboncoin's business model doesn't fall within the tax law's remit as it doesn't monetise commission and most of its revenue comes from classified ads rather than any form of direct advertising.

Last year, Amazon's lawyers managed to successfully argue that the company should be exempt from the GAFA/GAFAM tax which led to an amendment closing other possible loopholes for crafty businesses.