France Proposes to Tax the Internet

France has proposed an Internet tax on the collection of personal data, reports the NY Times. The country is seeking fresh ways to raise funds and frustrated that American technology companies that dominate its digital economy are largely beyond the reach of French fiscal authorities.

A new report commissioned by President François Hollande, described various measures the government was taking to address what the French see as tax avoidance by Internet companies like Google, Amazon and Facebook. The 198-page government report to the French Ministry of the Economy (pdf) outlined a proposal that, if approved by the French government, would impose a tax on tech companies based on how many users a site like Facebook or Google has, and how much personal information those companies hold.

The new tax would require legislation, which the government said could be introduced by the end of the year.

Google generates more than $30 billion a year in advertising revenue, including an estimated €1.5 billion, or $2 billion, in France. Yet, like other American Internet companies, it pays almost no taxes in France. That state of affairs upsets France’s policy makers, as public finances have been stretched thin and French Internet companies struggle to gain traction, explains the NY Times.

“We want to work to ensure that Europe is not a tax haven for a certain number of Internet giants,” the digital economy minister, Fleur Pellerin, told reporters in Paris on Friday.

Google said in a statement that it was reviewing the nearly 200-page report.

“The Internet offers huge opportunities for economic growth and employment in Europe, and we believe public policies should encourage that growth,” the company said.

Posted by Sam Churchill on .

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