France Proposes 'Google Tax' To Protect Cultural Heritage

by Ulrika Lomas, Tax-News.com, Brussels

11 January 2010

A report presented recently to the French Culture Ministry has proposed a series of measures designed to improve the legitimate supply of cultural services provided over the Internet and their financing, including most notably the introduction of a new tax to be levied on the online advertising revenue derived by Internet giants such as Google.

The Culture Minister Frédéric Mitterrand commissioned the report into “creation and internet” in a bid to extend the set of sanctions already contained in the country’s 'Hadopi' law, which is cracking down on Internet piracy.

In order to finance the proposals, estimated at around EUR50m in 2010, and between EUR35m and EUR40m a year in 2011 and 2012, the report advocates the introduction of a levy imposed on online advertising revenue.

Dubbed the “Google tax” by one of the main authors of the report, Jacques Toubon, himself a former French Culture Minister, the levy is designed to support creative industries and online press sites. A threshold level for the tax would ensure that the levy only affects large companies such as Google, Microsoft, AOL, Yahoo, and Facebook.

France is determined to defend its cultural heritage and to crack down on repeat illegal downloaders. The government’s highly controversial 'three strikes' anti-internet piracy – or Hadopi – law went into effect on January 1.

Under the new law, those found to have made available copyrighted material or downloaded copyrighted material from file sharing websites receive two warnings before being fined or – ultimately – disconnected.

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