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France Moves to Tax YouTube, Dailymotion to Pay for Arts Programs
Some of the web's biggest sites escape without paying their share, French politicians believe. The YouTube tax clears its first hurdle.

Late last week, France took the first step in creating a tax on online video sites. Under the duty, dubbed the "YouTube tax," sites that show ads on both free and premium video, such as YouTube and Dailymotion, would be taxed 2 percent of their ad revenue. The tax is much higher—10 percent—for video that's pornographic or could incite violence. The tax would apply to ad-free sites like Netflix, as well, which would pay based on their subscription revenues. The tax includes a provision to limit the amount paid by smaller sites. The bill was passed by the lower house of the French legislature.

Proceeds from the tax would go to local artists: The first €70 million would be dedicated to the National Film Board, with any funds above that going to the state budget.

The bill hasn't become law, yet: The French Senate will look at it in the fourth quarter of the year. If it passes there, the European Union needs to give its blessing.

The tax is a move to generate revenue from the largest online sites, such as Google, Amazon, Facebook, and Apple, which France believes don’t pay enough in taxes. Similar efforts to create a tax in 2010 failed.

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