French Govt. Wants To Tax Online Ad Revenue Generated From Thier Country

The French government is working on a tax plan to charge online advertising revenue generated from actions within their country, Clickz reported Friday. Just how they would determine the numbers will be interesting to see.

" A report presented to the French government this week suggests that each time an ad is clicked, online firms should be charged a levy of between one and two percent of the revenue generated, which would then be used to compensate media and content owners in other sectors, such as recorded music or print media, for example.

The proposal, commissioned by the government, was written by former music executive Patrick Zelnik, former minister Jacques Toubon, and the president of Sotheby's France, Guillaume Cerutti. It singles out a number of major online ad firms including Yahoo, Microsoft, and search giant Google. According to the Guardian, Toubon told the Libération newspaper in France the aim of the proposal was to curb "the limitless enrichment" of the world's leading internet players," ClickZ stated.

The scope seems to be broader than PPC generated revenue and considering people spend money to get placement in the organic results and make money from the traffic it could become a tax on all search engine activity.

As SitePoint asks "how can the Government monitor sponsored links when they are clicked by French users? ISPs could be forced to implement link monitoring software but that's a huge and costly undertaking. In addition, how would revenue amounts be associated with each link? Click costs can vary from a fraction of a cent to hundreds of dollars."

Forcing ISPs to monitor the clicks and then determining if income was generated would be hard and then getting companies that have no offices or servers in France would create even more challenges.

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About the author

Frank Watson has been involved with the Web since it started. For the past five years, he headed SEM for FXCM -- at one time one of the top 25 spenders with AdWords. He has worked with most of the major analytics companies and pioneered the ability to tie online marketing with offline conversion.

He has now started his own marketing agency, Kangamurra Media. This new venture will keep him busy when he is not editing the Search Engine Watch forums, blogging at a number of authoritative sites, and developing some interesting online community sites.

He was one of the first 100 AdWords Professionals, a Yahoo and Overture Ambassador, and a member or mod of many of the industry forums. He is also on the Click Quality Council and has worked hard to diminish click fraud.