France considers Internet tax, says report

LONDON – The French government is considering ways to tax Internet based companies that contrive to sell products and services in France without paying much to the government there by way of taxes, according to an Agence France-Presse (AFP) report.

Google, Apple, Facebook and Amazon are being targeted the report quotes Yves Le Mouel, head of the French Telecommunications Federation (FFT), as saying. The GAFA quartet has annual sales of around five billion euros (about $6.1 billion) in France, the report said.

It is an old question that first surfaced in the 1990s when the Internet first became popular and facilitated international sales. The idea of an internet tax was put to one side at that time because individual countries found it too difficult to address and were wary of the economic penalty of not developing as knowledge-based and Internet-enabled societies.

The French government has now launched a study due later this year that will again look at levies on Internet-based companies.

"Our fiscal system has trouble integrating new transaction forms generated by the digital economy. The result is a loss of income for public finances and a competitive disadvantage for French companies with respect to international groups which have organized themselves to evade or diminish their taxes," the report quoted French ministries as saying in a statement.