French President Francois Hollande announced Monday that Google and the French press have until the end of January to resolve their proprietary issues before Hollande will push for legislation requiring Google to pay press for the snippets of text that appear in Google News. “It is normal that those who make a profit from you work to pay a cut… It will be the search engines who finance the press” Hollande is quoted as saying in Les Echos. This iteration of the Google Tax is just the latest attempt at the French government to take a cut of Internet’s largest company, who has effectively avoided paying taxes on its revenue in France by running all ad revenue in Europe through its European HQ in Ireland.
Years ago, France tried to implement a tax on “digital goods” in France, effectively taxing the purchase of AdWords and AdSense – the plan backfired when Google passed the tax onto the French consumer, which includes, of course, many of France’s biggest as firms. The tax was repealed a few months after its implementation at the request of French companies.
More recently, the French Government has hinted at a more refined “Google Tax,” which would tax companies who store personal day about French citizens. The tax would obviously affect companies later than Google, but the search giant has received much of the attention, given that it pays less than 3% tax on Revenue made from French clients (through a very legal tax scheme).
France will continue to try to tax Google, and Google will continue to evade it. Brazil implemented a similar tax years ago – the result? Google doesn’t reference Brazilian press.