France: La 'Google Tax'

According to yesterday’s Le Figaro article, companies advertising online will have to pay a tax – the infamous ‘Google Tax’ – equalling 1% of the yearly ad spend from January 1st 2011.

This tax creation was proposed by french  ‘député’ Philippe Marini who also requested to tax french companies e-commerce revenue by 0.5%. France has a tradition of taxing revenue generated by advertising but this is a first where the advertiser is taxed. Some say this is a hidden way for the French government to tax ‘ad revenue giants’ such as Google that based their EMEA heaquarters in ‘fiscal & tax heavens’ such as Ireland…

L’Union Des Annonceurs – french advertisers association -  says ” [...] it will slow down developments and productivity. Google and other advertising platform giants will not suffer from this tax. But indeed the French SME, sole traders, charities, not the large corporations…”

Online advertising market reached €uro 2 billion in 2008, France online ad spend in the first half of 2010 passed €1 billion ($1.4 billion), according to several sources…

Some say that Google’s recent investment in France ($ 10 million investment in a French cultural center & R&D center to be opened in France) was a hidden failed attempt to soften France and forget about that nicknamed ‘Google tax’. It did not prevent anything!

YouTube campaigns & FaceBook Groups have been created to rally companies and individuals to the cause, but the buzz did not take…

The french Finance Minister -a.k.a Bercy – is in favor to postpone the ‘Google tax’. Will it be the likes of Google, Apple, Yahoo! etc salvation?

Christophe Bernigaud

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