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French proposal would tax smartphones and tablets to fund cultural projects

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the times nexus 7
the times nexus 7

Reuters reports that a new proposal delivered to French President Francois Hollande today would create a one percent tax on the sale of internet-connected devices, like smartphones and tablets, to fund cultural projects in the country. France has tussled with technology giants in recent years over taxation, which are accused of using loopholes to avoid paying taxes in the country, and today's proposal is the latest effort to secure new sources of revenue from companies like Apple, Google, and Amazon. "Companies that make these tablets must, in a minor way, be made to contribute part of the revenue from their sales to help creators," French Culture Minister Aurelie Filipetti told Reuters.

As The Associated Press reports, the new scheme would bring in about 86 million Euros per year (about $112 million), with revenues distributed for cultural industries creating French content. Reuters notes that the report targets hardware specifically for its revenue potential, indicating that consumers spend more money on hardware than content. The proposal uses the authority under France's "cultural exception:" a trade policy that privileges and promotes French-made cultural goods and services designed to insulate the country's culture from outside markets.

Companies that pay exceptionally low taxes could be hit by France's cultural exception

Previous efforts to collect tax from internet giants include a 2010 effort in which lawmakers proposed a one percent tax on all online advertising expenses in France, and a January, 2013 proposal that would tax the collection of personal data from users. The country has also been eyeing a tax that would force companies like Google to pay for links to content, including newspaper publications, but has been unable to find agreement on that measure. Google in particular is a juicy target for France, which has been estimated to earn $2 billion a year in the country while paying virtually no taxes. Last March, then-President Nicolas Sarkozy told Le Point magazine that such loopholes are "unacceptable."

The new hardware tax proposal is far from implementation; as Reuters reports, President Hollande has requested legislative review of the proposal by the summer.