Sarkozy returns to online ad, Euro corporation taxes

As he runs for re-election, French president Nicolas Sarkozy has revived the idea of taxing internet giants in an interview with Le Point magazine. An online advertising tax was passed by parliament then dropped last year due to criticism from French companies arguing that big operators headquartered in Luxembourg and Ireland would avoid paying it. According to Sarkozy, corporate tax laws written in the 1990s are not adapted to the internet age, writes Les Echos. A faster option than rewriting bilateral agreements with hundreds of countries would be to push for the adoption of a European directive that would be imposed to all countries. But may be blocked by Ireland and Luxembourg. A second route would be to apply an online advertising tax, but instead of taxing companies that advertise, the tax would apply to vendors of online advertising space. Google responded by saying that the internet contributed 3.2 percent of France's GDP in 2009, which could rise to 5.5 percent in 2015, and that policy should encourage rather than hinder this growth potential. Google, Apple, Facebook and Amazon turnover EUR 3 billion a year in France but pay only EUR 4 million of corporate tax, when they would pay around EUR 500 million under French tax law, according to the public-private Digital Economy Commission.