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January 18, 2013

France to propose new law to make sure web giants pay taxes

The government plans to include the proposal in their budget for 2014.

By CBR Staff Writer

The French government is planning to propose a new law by the end of 2013 aimed at changing tax procedures to make sure global Internet firms, like Google and Amazon, pay their taxes.

According to Les Echos newspaper, The French Finance Ministry report titled, ‘Taxation of the digital economy’ is aimed at seeking to tax user data collected by web firms.

"Since web companies pay little tax in France on their real business, the authors of the report recommend a taxation system that is based on the user data the companies exploit," the newspaper said.

Web giants are known to offer free services to users and then sell targeted advertising to firms based on the size of their audience.

The government intends to rapidly push the new proposal and expects to include it in the budget bill for 2014, which is usually submitted to Parliament in September.

French authorities previously alleged that Amazon had avoided paying corporation tax in France by shifting its profit to Luxemburg and taking advantage of their generous taxation policy of non-domestic earnings.

Amazon said to have paid taxes at a rate of 11% on foreign profits last year while the French government levies taxes on company’ profits at a rate of 33%.

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Google, Amazon and Starbucks were also questioned by UK lawmakers over the usage of complex accounting methods to avoid tax liabilities in the country.

Google was also alleged of transferring $10bn in revenues to its Bermuda subsidiary to avoid paying global income tax of around $2bn in 2011.

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