France to introduce `Google tax’ Jan 1

PARIS - France will introduce its so-called “Google tax” on online advertisements Jan 1, parliament decided Tuesday.

The tax on companies based in France would be amount to one percent of the net amount spent on online advertising.

The measure was dubbed “Google tax” because it was originally conceived as a direct tax on the search engine and its competitors.

The parliamentary commission has for some time been working on a deal for the 2011 national budget, which has already been approved by the two houses of parliament.

A compromise was reached after considerable changes to the bill, which still has to be formally approved. It appears unlikely that the draft legislation will be overturned.

At the beginning of the year, President Nicolas Sarkozy called for additional tax on Google and its competitors.