The culture ministry of France said today that France should start taxing Internet advertising revenue at Google, Yahoo, Facebook Microsoft and AOL.
According to the Ministry, funds raised from the levy could raise up to 20 million euros ($29 million) a year.
The effort would aim to put an end to “the endless enrichment without payback,” Jacques Toubon, one of the authors of the report,
The recommended tax would be imposed on the ad revenue of companies, based on the online use of their services in France.
The 69-page report carries 22 proposals, such as increasing spending on digitizing books, creating Internet portals to aggregate online content, cutting the tax for online cultural sales, and setting up bodies to ensure artists are paid for works downloaded from the Web.
The cost of the various proposals would be about 50 million euros in the first year, the report said.
This is another example of what I warned against for the coming year.
Local governments trying to regulate and now get tax dollars from the Internet.
We all know the world is headed on to the Internet and governments around the world know this too.
Expect more actions by countries and local jurisdictions to impose special rules and taxes on Internet based businesses
Just wondering how they want to get hold of the money. If it is a company not located in France, the company would naturally fall under local tax laws and not under the French tax laws. They could only block access to the websites, but that wouldn’t make the Frnech internet users very happy.
Possibly enforced with Tax treaties with the US
The US and the G-20 have gotten a whole bunch of new tax treaties signed in the last year
Google could just buy France and eliminate the culture ministry .
USA already collects VAT for EU (if you buy online something in the US from EU they add VAT to the purchase)
“USA already collects VAT for EU (if you buy online something in the US from EU they add VAT to the purchase)”
???
If the user/buyer is not located within the EU, there should not be any VAT charges. When you buy for example a watch in Germany and you fly back to the US, you can claim your VAT back at the airport.
When I registered domains in Europe, I don’t need to pay the VAT!
If a US online company (or a company located anywhere for that matter) sells online services to a person in the EU, the company is legally obligated to register for (and pay) VAT in the customer country. Failure to do so is probably a criminal offense in the customer country.
If you are an individual or a small company it is quite easy to ignore this sort of legislation, but for for global companies it is just not possible.
As an aside, a few years ago one of the big online dating sites ran into a large penalty for not paying the VAT.
If I order books from amazon.com in the US, they are not taxed with European VAT on their invoice. They export the goods, thus me as the “importer” would be liable for any VAT.
If we are talking digital products like software or music, it very much depends on the laws of individual countries. Like I mentioned before, when I register for example .it domains the registry does not charge me VAT asI do not live in Europe.