French lawmakers voted in favor of a “YouTube tax” that would apply a 2% levy on all streaming video, and a 10% rate on any online films that are pornographic or capable of inciting violence.
The proposed tax, which passed France’s National Assembly but requires further approval to become law, would also apply to companies like Netflix (NFLX) and Vimeo, and would be calculated based on subscription or advertising revenue.
Karine Berger, a French lawmaker, described the measures to the business paper Le Figaro as part of a plan to extract more revenue from “the GAFA” (shorthand for “Google (GOOGL), Amazon (AMZN), Facebook (FB), Apple”), which she claimed “escaped paying taxes most of the time.” A separate provision would limit the impact of the law on smaller video sites.
The proposal comes as part of a larger attempt by European countries to redress what they regard as unfair tactics by U.S. Tech giants to avoid paying a fair share of taxes. Currently, France is demanding Apple (AAPL) pay $14.5 billion in allegedly unpaid back taxes—a claim Apple and U.S. Lawmakers are stiffly resisting.
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In regard to the proposed “YouTube tax,” it’s uncertain how the tax would be collected or administered, and what the criteria would be for designating a video “pornographic” or violent for purposes of the 10% levy. It’s also unclear how the revenue would be used.
According to Le Figaro, an earlier version of the proposal called for revenue from the tax to be given to the National Center for Cinema, an agency of the French Ministry of Culture.
Meanwhile, the proposal’s final success is uncertain. Similar measures proposed in 2010 failed to become law and, as another publication notes, the “YouTube tax” would have to be approved by the European Commission.
