French proposal would impose 1% tax on Internet-connected devices

By on May 13, 2013, 12:30 PM
yahoo, tablet, french, dailymotion, culture tax, smartrphones, internet-connected, french government

A new proposal recently delivered to French President Francois Hollande aims to create new sources of revenue from tech giants like Amazon, Apple and Google. If passed, the legislation would create a one percent tax on the sale of all Internet-connected devices in the country to help fund cultural-based projects.

Tech makers selling smartphones and tablets have been accused of taking advantage of loopholes in the local tax system to avoid paying hefty taxes to the French government. The proposed tax would bring in about $112 million per year in extra revenue – most of which would come from the sale of hardware.

The hardware tax is just the latest tax collection effort from French officials. In 2010 lawmakers proposed a similar one percent tax for all online advertising expenses. Earlier this year another proposal aimed to collect tax from those that collect personal information about users. There’s even talk of a tax that would force big companies to pay for content links.

The proposal could increase tension between the country and tech giants. It comes just weeks after the French government put a stop to a deal that would have seen Yahoo purchase a controlling stake in online video website Dailymotion for $300 million. Officials didn’t like the idea of losing control over one of the biggest Internet successes, according to reports.

The latest proposal still has a long way to go before becoming a law, however. President Hollande reportedly requested legislative review on it by this summer.

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