
France Proposes an Internet Tax - atestu
http://www.nytimes.com/2013/01/21/business/global/21iht-datatax21.html?pagewanted=all
======
rtpg
> That state of affairs upsets France’s policy makers, as public finances have
> been stretched thin and French Internet companies struggle to gain traction.

and you wonder why....

Seriously, France makes it very hard for small business owners to exist.
Either you are a tiny single-owner, or you're a big corporation, but the fixed
costs to going from single owner to limited liability is pretty intense. That
and all the smart people get convinced to become bankers or managers, while
all the motivated (in terms of coding) people go into the abysmal university
system.

The ultimate irony is that the grandes ecole system seems like the perfect
storm to create some very intelligent entrepreneurs, but these students
(technically incompetent but motivated and competent on a management level)
are in completely different schools from the people with actual know-how , who
get forced into consultancies mainly, to write Java enterprise code for the
rest of their lives.

~~~
p4bl0
You obviously don't know anything about the French academic system and grandes
écoles. Or you are being hypocritical.

Anyway, back to the subject. The idea behind all this is the following: there
are a number of activities, for instance the press, which suffers from the
internet. People read the news online and don't subscribe to paper press
anymore. They also don't want to pay to much for reading the online press. To
get good articles in the papers, you need to pay professional journalists. So
the conclusion is that the press industry needs to find a new business model.

As it happens, there are companies making fortunes on internet, and their
business largely depends on the contents that is created by others. This is
particularly true with Google and the press industry. If you see it that way,
it seems only fair that Google participate in paying the journalists producing
quality content that makes people use their search engine and/or see their
ads.

Now the question is, how to achieve this? Let the situation evolves and see
what happens? This would lead to the decline in quality of the article in the
press and eventually to entire journals disappearing, except for some of them
for which some private groups have invested in. This is not something that we
want because private interest and information don't mix well together. It is
the case that many journals are in (sometimes big) part financed on public
fund, so the other solution is to augment those public funding, and have the
government take care of collecting the money. This is done using taxes.

I hope this makes the intention clearer to those of you who don't live in
France.

~~~
Raphael_Amiard
> You obviously don't know anything about the French academic system and
> grandes écoles. Or you are being hypocritical.

Well i obviously know some, i've done two master degrees in French university,
one in Computer Science and one in Sociology, and i've found the GP's post to
be pretty accurate.

So please feel free to post a real rebuttal, i'm ready to argument at least as
to why i think french university education prepares very badly to anything
practical and creative that isn't in the domain of pure academia.

This for example :

> are in completely different schools from the people with actual know-how ,
> who get forced into consultancies mainly, to write Java enterprise code for
> the rest of their lives.

is actually pretty much 95% true. When you get out with a french comp-sci
degree, you are presented with the following choices (by your professors and
the businesses linked to the university) :

\- Either go into research

\- Either go into very specialized industrial work (high safety embedded
systems, mission critical components)

\- Either go into big consultancies doing Java (Cap Gemini and such)

This does not arise from maliciousness, but only from the fact that those are
the three main areas in which there is work for comp-sci students in France.
The area of consumer oriented innovative enterprises, be them big or small, is
pretty much nonexistent.

The courses in my university (which is supposedly the second best french
university for computer science) are quite difficult, some of them are even
good (most notably in the domain of logic/semantics, programming language
research and the likes), but most of them are either:

\- Highly theoretical, based on subsets of domains that have seen no massive
practical use in decades, still being taught because they are the teacher's
PHD subject. \- Supposedly practical, but using outdated/horrible/both
technologies.

For example, i have had two introductions to web development at University,
one using bash scripts and C (no kidding), by some sort of mad teacher who
thought reimplementing libC with more ternaries was the way to go about life,
the other using such things as JSP/Spring Framework, obviously designed to
target those students who were gonna go in the "Enterprise world". Both made
me want to kill myself (figuratively).

On a variety of more "academic" subjects where we are actually supposed to
have some experts here in France, be it systems programming, embedded systems,
highly parallel programming , the quality of the courses when compared to
those of top american universities (which are as of now widely available for
free on the interwebs) is so low that it is really, truely depressing.

This is obviously a complex problem, and there are no black and white, but if
you are really able to argue that there is no truth to the statement of the
GP, then you are the one who doesn't know a lot about french university, or
being hypocritical.

~~~
danmaz74
"based on subsets of domains that have seen no massive practical use in
decades, still being taught because they are the teacher's PHD subject.": This
reminds me of my "Informatics II" course in 94 here in Italy. The whole course
was about Logic programming and Prolog... a technology that never had a
practical use and had already been out of fashion since the collapse of the
"5th generation" fad. But it was all my teacher was expert about.

------
rgo
Governments around the world have been suffering the "Not Taxed Here" syndrome
for a long time. Companies making money across borders can pay their corporate
taxes elsewhere, wherever is more convenient, sometimes in the US, sometimes
in Ireland, etc. This is not specific to Google or Facebook. There are many
evasive tricks, most of them legal, like having headquarters charge branches a
high price for "services and goods" therefore drying up local profits. [1][2]

The online advertisement business is just another disruption on the "tax
industry". Taxes on a global market are a doomed business. Bring these
corporate practices effectively into the public eye and negotiate from there.
Foster competitiveness. But don't push yet another distorting set of laws onto
an already high pile of bureaucracy.

[1] [http://news.cnet.com/8301-13579_3-57544873-37/apples-
taxes-o...](http://news.cnet.com/8301-13579_3-57544873-37/apples-taxes-on-
overseas-profits-last-year-less-than-2-percent/)

[2] [http://www.ifoapplestore.com/2012/05/23/spain-retail-
financi...](http://www.ifoapplestore.com/2012/05/23/spain-retail-financials-
reveal-controversial-accounting/)

~~~
mongol
Indeed. Especially common it seems to be to make a subsidiary in one country
pay another company a license fee for using the brand.

But making legal hurdles against moving profits this way is not something I am
against, I find it more fair if profits are taxed where they are made rather
than one country making all tax profits on the expense of others.

But the legal construction should be simple, make sense, and be effective. Not
so easy to achieve.

------
ernesth
First, I don't think that what Amazon, Google and others do is just "seen as
tax avoidance". Their scheme is clearly devised to minimize taxes they pay in
countries where taxes are high and pay most taxes in Ireland and Luxembourg
where they are lowest. UK also remarked it and is searching for ways to
counteract it.

Second, this idea is just an idea, not a law project or proposition. There
have been reports as official as this one inciting free downloading and
instead, we got hadopi law...

Third, I find this idea quite interesting (at least new). It is quite
different from other internet taxes (Germany's google tax for example) in that
it gives a reason for taxation other than the worsening of old businesses. The
real idea being that the exchange of personal information for internet
services is a trade that needs not be untaxed, as barter can be taxed.

------
iamben
What would be the economic impact to French business if Google (and by
extension anyone else that would get taxed) didn't provide their free
services? I'd guess considerably more than the revenue they make?

~~~
jobigoud
Absolutely. It's ridiculous (and I'm french). Nobody is forcing anyone to use
Google services.

However, there is indeed an ongoing war between Google and the major ISP over
bandwidth costs.

"Free" one of the major ISP says that Google should pay a bit more for the
massive bandwidth taken by YouTube. Last week or so, they made a silent remote
update to all their router with an automatic filtering out of all Google ads.
That time it's the government that thought it was a bit too much. War I tell
you.

~~~
revelation
That war will be quickly over once Google blocks Free internet users. If ISPs
are hellbent on making internet access a premium product with various feature
sets and tiers and segregation, let them have it.

Your post is missing the critical two words net neutrality (which is what we
want) and douple dipping (which is what ISPs want).

------
at-fates-hands
To me this is fairly obvious. Their economy is collapsing and they're trying
desperately to raise additional revenue to avoid a situation like Greece.

Since their economy is based on the Euro, they can't print their way out of
debt like we do here in the USA. Thus, they need to find alternate ways to
generate revenue.

------
ntumlin
This is a bit scary. I hope it doesn't give any other countries some ideas.

Would there be anything Google could do to counter this?

~~~
guard-of-terra
The thing they did with China? Move their french "operations" to Monaco
(domain and stuff), serve their audience from "there" and sit on that.

~~~
antr
I'm pretty certain Monaco goes online via France, no submarine cable
available. I guess this would be a futile move.

~~~
guard-of-terra
I don't think that network topology is terribly relevant here. International
law is.

~~~
antr
If law is the tool to tackle this issue (which I agree it is), the EU should
really handle this. What Google and other corporations are doing is avoiding
taxes on economic activities going on in EU territory. This is the real
problem, paying no taxes while creating a trade balance deficit. These two is
what make governments angry.

------
chmod775
I just quickly had to check that again: Google is making about $30 on average
for every person living in France. Even taxing Google alone 5-8% would earn
France a significant amount of money, not to speak of all the other large
companies making tons of dollars in online business. Fascinating.

~~~
newbie12
Check again. Google's revenue in France is $2 billion, but their overall gross
profit margin is little more than half that...so roughly they are making $15
per French citizen.

~~~
nraynaud
check again, their declared revenue in France is disputed by the tax service.
So you can't compute with published figures.

~~~
tomjen3
Of course you can. The tax service lies.

------
mehdim
France propose to tax companies which don't open API of personal data they
collect [http://api500.com/post/40846639254/taxing-companies-which-
do...](http://api500.com/post/40846639254/taxing-companies-which-dont-have-
open-apis)

This is not an Internet Tax...

------
gst
So what is France going to do with Internet companies that don't have any
offices in France (and that just ignore this tax)? Just block their websites?

------
martinced
There's already an Internet tax. Anyone in France who pays an ISP to provide
an Internet connection pays VAT to the french state.

So it's really: "France proposes yet another Internet tax (and shall still be
unable to reach budget equilibrium because of the ineffiency of its army of
overpaid state-workers providing really-not-much to its citizens)".

~~~
camus
That's France , they dont know how to put people back to work , but they sure
know how to tax everything out of existence , the results are simple : every
new tax cent from businesses is paid by the final consumers one way or
another, so prices are sky rocketing, making the poor poorer.

France needs revenue it's true (and also cut spending big time), but needs to
create good jobs first, and make it less risky(and painfull) for a startup to
hire people.

Population is getting older , and rightfully we need to take care of old
people , who is going to pay for all that welfare stuff ?, not businesses ,
they are leaving France and are right to do so

~~~
martinced
I know... I pity you if you're still in France.

Do like me: I moved to Brussels. And I'll move further away if they try to
take more liberties away from me.

I hate socialists and communists and I'll go as far as needed as to not see
them in power (Belgium is a bit special in that there are always coalitions of
six, seven, eight political parties ruling the country... Including both
liberals and socialists. So Belgium is safe for now).

Come here, it's a good place to be.

------
yanw
So France wants to tax Google for indexing newspapers, and as recently as this
month there were talks about a tax to "compensate" telecos for delivering
YouTube clips.

Now they come up with a "personal data" tax scheme targeted at Google: is it
just the case that people who really hate Google were voted into power?

~~~
AnthonyMouse
>is it just the case that people who really hate Google were voted into power?

It really seems that way. I mean how else can you explain that all of their
ideas are _so stupid_.

As a general rule, if you're trying to scheme up some way to "get" Google,
stop. Think first. The first question you should ask is: What will this do to
companies that _compete_ with Google? Will it bankrupt them? Give Google an
advantage over them, because its large legal staff can better navigate the
law, or take advantage of economies of scale? Because if it does, and your aim
is to hurt Google, you've failed. All it does is strengthen their market
position and increase their likelihood and ability to diverge from their
"don't be evil" roots and embrace the dark side.

I mean just think about this tax for two seconds: Never mind the complete
inability to administer it (how do you collect the tax from a company with
zero business presence in France whose site is still visited by French users?
Or do they get a pass, causing websites to flee the country en masse?), what
does this do to the incentives of the legislature? Now their tax revenue is
_based on companies collecting personal information from users_. Anything that
would stop or even slow that down is now a significant "cost" to the
legislature because it reduces the revenue the tax generates, so I hope none
of you ever wanted to see any internet privacy regulation again.

It really seems like these people don't even think for one second before they
open their mouths.

