Tax man trying to figure out a way to outsmart Google

If a new French government proposal (Google Translate) is implemented, tech companies earning money in France would pay new taxes based on how much personal data is collected from their users. For months now, lawmakers around the world have lambasted financial shenanigans in use by Google, Amazon, Apple, and many other tech companies that employ legal techniques to shift income and drastically minimize their tax burden.

British and French officials have gone after Google in particular. Margaret Hodge, the United Kingdom’s public accounts committee chair, slammed Google’s northern European operations chief last year, saying, "We're not accusing you of being illegal, we are accusing you of being immoral.”

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France has floated a proposal that would impose a new tax on the collection of personal data as a way to counter tech companies’ tendency to legally move money around Europe—between Ireland, Bermuda and the Netherlands. Google, for example, despite an estimated $2 billion in ad revenue in France, pays almost no taxes in the country.

Last Friday, a 198-page government report to the French Ministry of the Economy outlined a proposal that, if approved by the French government, would impose a tax on tech companies based on how many users a site like Facebook or Google has, and how much personal information those companies hold.

The report argues that because nearly all of these services are given away for free (or as part of a “freemium” model), that the companies are making huge profits at the expense of personal data, collected for free. The report, however, does not specify specific tax rates, nor how much money this plan would raise.

Still, France’s digital economy minister, Fleur Pellerin, said at a press conference (Google Translate) that the report “gives us a number of ideas and paths,” toward a way to raise more money via tech companies.

“The use of personal data and the income derived from them are part of the paths that we want to look at, but it is not the only path,” she said.