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France Economic Stupidity Taxing Facebook, Google And YouTube, to Finance French Films No One Watches

Politics / France Dec 29, 2013 - 12:20 PM GMT

By: Mike_Shedlock


The economic stupidity in France is astounding. It's hard keeping up with all the inane ideas of President Francois Hollande's socialist administration. Here's another one of Hollande's ideas for your amusement.

RT reports French broadcasting watchdog CSA eager to tax YouTube, Facebook, Dailymotion

France's Superior Council of Audiovisual, an independent broadcasting authority, wants to impose taxes on media giants like YouTube, Facebook and Dailymotion to force them to contribute to financing French culture.

The sites fall into the same category as video-on-demand services, the organization said; so they would be subject to French cultural protection laws that require distributors to hand over some of their revenues to help subsidize productions.

“These platforms have been developing partnerships with audiovisual publishers and content providers for years, with which they share revenues from advertising," the report [in French] said.

The watchdog has urged the French government to conduct research into the websites’ profit from professional productions and to determine how much they may be required to pay.

The obstacle which remains, though, is the fact that the legislation is only applicable to websites that are based in France. In the future, the organization is planning to demand all video-on-demand services to declare their existence to the CSA.
Culture Tax

Bloomberg reports France's 'Culture Tax' Could Hit YouTube and Facebook
Should YouTube subsidize le cinéma français? France’s audiovisual regulator thinks so. 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.

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.
Subsidies For Films No One Watches

Forbes has some interesting comments as well. Please consider French Try Another Tax On Facebook, Google And YouTube
France is trying to impose another tax upon Facebook, Google and YouTube. It’s going to go into subsidies for all those French films that no one ever watches. Which is, of course, why they need subsidy.

The basic background here is that the French are so proud and so confident of the superiority of their culture that they fear it will be wiped out by all these imports of American and other “Anglo” productions. They thus have various limits on how many of these imports there can be: even to the point that in the past they have had exemptions from the standard European Union strictures on the free movement of goods and services. They’ve even got a law stating that English cannot be used in advertising: this named after the Minister that brought it in, Jack Allgood.

There is just one small problem with this:

The obstacle which remains, though, is the fact that the legislation is only applicable to websites that are based in France.

The moral of the story is "Don't base websites, start businesses, or expand businesses in France".

By Mike "Mish" Shedlock

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Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Visit Sitka Pacific's Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

I do weekly podcasts every Thursday on HoweStreet and a brief 7 minute segment on Saturday on CKNW AM 980 in Vancouver.

When not writing about stocks or the economy I spends a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at .

© 2013 Mike Shedlock, All Rights Reserved.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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