French Government Passed 'Google Tax' Payable by Online Advertisers

French government this week passed a new tax on online advertising spends called the "Google tax" and that will start Jan. 1, 2011, reported Le Journal du Net. The tax will be paid by online advertisers, not Google directly unless they advertise their products a lot in France."Such a tax would mechanically reduce the revenue […]

French government this week passed a new tax on online advertising spends called the "Google tax" and that will start Jan. 1, 2011, reported Le Journal du Net. The tax will be paid by online advertisers, not Google directly unless they advertise their products a lot in France.

"Such a tax would mechanically reduce the revenue of French players based in France and even delay the date at which they can hope to find their equilibrium. When we realize the fragility of these emerging companies for which advertising is often the only resource is to condemn many of these start-ups that have yet to need more than incubators gravediggers," the protest group wrote to the legislators.

The "domination of Google" in France is worrying the country's business regulatory body.

France's competition authority is said to be worried about how the search engine giant's omnipresence affects online advertising, and it launched an inquiry into Google two weeks ago.

Also, the French parliament has separately decided to impose a 1% tax on all online advertising from next year -- a move that is seen as an attempt to claw back some of the revenue from the largely offshore Google," the French Press Review noted.

[Source]