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<font size="+2"><font face="Calibri">France Proposes an Internet
Tax<br>
By ERIC PFANNER<br>
<br>
PARIS — France, 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, has proposed a new levy: an Internet tax
on the collection of personal data.<br>
<br>
The idea surfaced Friday in a report commissioned by President
François Hollande, which described various measures his
government was taking to address what the French see as tax
avoidance by Internet companies like Google, Amazon and
Facebook.<br>
<br>
These companies gather vast reams of information about their
users, harnessing it to tailor their services to individuals’
interests or to direct customized advertising to them. So
extensive is the collection of personal details, and so
promising the business opportunities linked to it, that the
report described data as the “raw material” of the digital
economy.<br>
<br>
“They have a distinct value, poorly reflected in economic
science or official statistics,” the report said.<br>
<br>
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.<br>
<br>
“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.<br>
<br>
But getting Google and other U.S. technology companies to pay
more corporate taxes on their profits in France could take a
long time, the report acknowledges, because this will require
international cooperation.<br>
<br>
In the meantime, France has discussed a variety of other
taxes. Under the predecessor to Mr. Hollande, Nicolas Sarkozy,
the government proposed a levy on Internet advertising. But
that idea languished after local companies complained that it
would affect them more than Google. Mr. Hollande’s government
is also overseeing talks between Google and French online
publishers, who want the search engine to pay them for linking
to their content.<br>
<br>
The report published Friday said a tax on data collection was
justified on grounds that users of services like Google and
Facebook are, in effect, working for these companies without
pay by providing the personal information that lets them sell
advertising.<br>
<br>
The report says tax rates would be based on the number of
users an Internet firm tracked, to be verified by outside
auditors. The authors did not recommend tax rates or estimate
how much money such a levy could raise.<br>
<br>
Google said in a statement that it was reviewing the nearly
200-page report.<br>
<br>
“The Internet offers huge opportunities for economic growth
and employment in Europe, and we believe public policies
should encourage that growth,” the company said.<br>
<br>
The new tax would require legislation, which the government
said could be introduced by the end of the year. But other
revenue-generating proposals championed by Mr. Hollande have
encountered difficulty. A plan for a 75 percent income tax
rate on earnings of more than €1 million a year was rejected
by the highest court in France, which called it
discriminatory.<br>
<br>
Any proposal to generate taxes from the gathering of personal
information could also draw scrutiny from the French privacy
regulator, which has raised concerns about the amount of data
that companies like Google and Facebook collecT<br>
NYT<br>
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