In order to finance the "culture industries' digital transition," France's Culture Ministry believes Facebook and YouTube should be included in the so-called "Culture Tax" that movie theaters and broadcasters currently pay. The argument is that these sites have become "professional" content providers of video-on-demand serives. But, not content in taxing our leisure time, Bloomberg Businessweek reports the French are considering taxing individual use of smartphones, tablets, and other electronic devices capable of accessing movies, music, or other media content. A "painless" 1% sales tax imposed on these items is expected to raise EUR 86 million annnually.
In a report this week, the Superior Audiovisual Council (CSA) says that video-sharing websites should be subject to a tax that helps finance the production of French films and TV shows.
The so-called culture tax, totaling more than €1.3 billion ($1.8 billion) annually, is paid by movie theaters, broadcasters, and Internet service providers in France. The CSA contends that YouTube (GOOG), French video-sharing site DailyMotion, and their ilk are effectively providing video-on-demand services, which are already subject to the tax.
Although the CSA report says that videos posted online by private individuals should not be subject to taxation, it contends that video-sharing sites increasingly have become “professional” content providers.
Separately, France is considering a tax on smartphones, tablets, and other devices as another source of revenue for cultural subsidies. A government-commissioned report, released in May, said that a sales tax of 1 percent should be imposed on electronic devices capable of accessing movies, music, and other content. The proposed tax would raise an estimated €86 million annually that would be used to finance the “cultural industries’ digital transition,” France’s Culture Ministry said at the time.
Trade associations for French Internet and technology companies spoke out against the proposal, which the government has not yet acted on. Rejecting the government’s assertion that a 1 percent tax would be “painless,” the groups warned in a statement in July that the government should be encouraging growth of the digital economy, rather than taxing it.