BRUSSELS (Reuters) - France and Germany sought on Tuesday to salvage a proposed EU tax on big digital firms including Google and Facebook by narrowing the focus to cover only companies' online advertising revenue.
In March, the European Union's executive arm proposed a 3 percent tax on big digital firms' online revenues, accusing them of funnelling profits through member states with the lowest tax rates to keep their overall tax down.
"It's a first step in the right direction which in the coming months should make the taxation of digital giants a possibility," French Finance Minister Bruno Le Maire said as he arrived for the meeting.
"Will it put all arguments to rest?, certainly not," he added.
Le Maire said that if the tax were adopted, individual countries like France would be free to impose it on a wider basis.
The tax requires the support of all 28 EU states, including small, low-tax countries like Ireland which have benefited by allowing multinationals to book profits there on digital sales to customers elsewhere in the European Union.
The European Union's current Austrian presidency has been trying to reach a deal on the tax by the end of the year. The Franco-German proposal calls for a deal by March.
The setback is a painful blow to French President Emmanuel Macron, as his government had invested considerable political capital in the tax. It is also seen in Paris as a useful example of joint European action before EU parliament elections next year.
(Reporting by Leigh Thomas, editing by Ed Osmond)
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