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France Advances On Internet Tax Plans

by Ulrika Lomas,, Brussels

26 December 2012

Tasked by the government with examining the issue of digital taxation, French state councillor Pierre Collin and finance inspector Nicolas Colin have recently submitted their initial proposals to French Budget Minister Jérôme Cahuzac and French Junior Minister responsible for the digital economy Fleur Pellerin.

To ensure a fairer tax contribution in France from US Internet giants such as Google, the rapporteurs have put forward two proposals.

The first and more ambitious measure involves plans to renegotiate existing bilateral tax treaties, while taking into account when calculating corporate tax the digital activities of Internet giants, including online sales of music, books, films, and advertising space, by quantifying personal data used, notably for advertising purposes.

The second initiative involves taxing according to the number of users, namely by imposing a tax of a few euros per user.

French Finance Minister Pierre Moscovici, French Minister responsible for Industrial Renewal Arnaud Montebourg, and French Junior Ministers Cahuzac and Pellerin announced plans back in July 2012 to launch an investigation into the current taxation of the country’s digital economy.

Aware that the French tax system has failed to keep pace with the rapid development of digital technologies and e-commerce, the ministers set up a working group to study how tax revenues from this sector of the economy can be increased while maintaining the competitiveness of France's digital industries.

The expert group were tasked with drawing up an inventory of the various taxes and levies that currently impinge on the sector, and carrying out an international comparison.

The group's final proposals were due to be submitted in December, but are now expected at the end of January.

TAGS: Finance | tax | mining | commerce | budget | Organisation for Economic Co-operation and Development (OECD) | agreements | e-commerce | France

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