Google and Facebook may be facing a hefty tax bill from the French government if a new proposal suggesting the introduction of a tax for online advertising is adopted.
A new report created by a group, including the president of Sotheby’s in France, Guillaume Cerutti, former minister Jacques Toubon and former music producer and digital consultant Patrick Zelnik, suggest that taxing Google, Facebook and similar portals, would create annual revenues of €9.99 million, which could be used to promote the legal sales of music, movies, books and other intellectual property online.
The new report was handed into the Culture Ministry earlier this week. It is not clear if the government has a timetable to act on it.
The proposals would cost an estimated €50 million in 2010 and €35 million in following years.
The levy, which would also apply to other operators such as MSN and Yahoo, would put an end to “enrichment without any limit or compensation,” Cerutti said.
It would apply even if the operator had its offices outside France, as long as the internet users who click on ad banners or sponsored links are local to France.
Google France's public affairs director told wires services that it will seek "cooperation between internet players and the cultural fields to develop new models."
One suggestion includes funneling tax revenues toward helping subsidize the cost of cards that young people could use to purchase music online, while others would fund book digitization and making more movies available online.
The authors also suggest taxing ISPs to raise tens of millions of euros that would be invested in developing the online music business and other creative sectors.