Things get expensive for Google in France

The French government has released proposals to tax online businesses for the collection of personal data, in a move that would dramatically increase their currently-tiny tax bills.

The idea is that this is where companies like Google are making much of their money: indeed, the report describes personal data as the ‘raw material’ of the digital economy. By contributing it, says the report, users are effectively working for the companies, a fact that should be reflected in the companies’ tax bills.

The proposals come as part of a growing tide of dissatisfaction with internet giants such as Google, Amazon and Facebook, who are seen as paying far too little tax in Europe, largely through a series of complicated accounting measures.

Google, for example, faced tough questioning in the UK recently after it was revealed that it had paid just £6 million in corporation tax in the country last year, on sales of £2.5 billion.

In France, the situation’s similar: almost no tax paid in the country at all, despite around €1.5 billion in local revenues. And the government is determined to get its cut. It earlier proposed legislation forcing major internet companies to pay for the use of French networks, but has recently postponed any legislation pending a review.

If approved, the new measure would be introduced next year.

Meanwhile, Google may be facing other unexpected costs in France. According to a report in Le Monde, the company offered to pay publishers €50 million per year to settle copyright complaints; but was turned down, with the publishers demanding up to twice as much.

Google already has a similar deal in Belgium, handing over $6 million to publishers – although it’s claiming this is an advertising deal, and nothing to do with copyright at all.

In France, though, time is running out. Legislators, impatient with the progress of talks, have said they plan to introduce a new law if no agreement is reached in the next ten days. If this happens, it would set a precedent elsewhere in Europe.