France may have been integral to creating the web as we know it, but Nicolas Sarkozy thinks that when it comes to taxes, 'internet giants' aren't paying their fair share. Shortly before meeting with the founder of Twitter, the French president told Le Point magazine that it was "unacceptable" that major internet companies "have a turnover of several billion euros in France without paying tax." He also said that the French government should look into taxing online advertising revenue.
A spokesperson from Google said that the company was already doing plenty to help the French economy. Saying that "the internet offers a wonderful opportunity to generate growth and jobs in France," Google pointed to a McKinsey consulting report that claimed internet companies contributed 60 billion euros to the economy and could create 450,000 jobs by 2015. We don't doubt that the web is an important part of the economy, but that may not appease Sarkozy, who is also attempting to get French "tax exiles" to pay tax on investment income.
This isn't the first time French politicians have considered taxing online ads. In 2010, lawmakers proposed a 1 percent tax on all online advertising expenditures in France. The tax, which proponents said would raise between 10 and 20 million euros a year, would have sent money back to cultural programs like newspapers or online publishing platforms. The French Senate approved the plan, but it was rejected by the National Assembly in 2011 after critics said that it would have little effect on major advertisers like Google, which runs its French ads out of Ireland.