Michaela Merz

France – 1% tax on electronic media devices proposed (Acte II de l’exception culturelle)

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On the 13th of May, the French government published a 700-page long report on the possible options to safeguard and maintain the financial support of the national culture industry. The government is of the opinion that the digitalization of distribution channels for commodities with cultural content such as films, music and books, calls for new avenues of financing to be explored as compared to the already existing ones.

The report provides approximately 80 recommendations as to how these goals can be reached. One of the most interesting suggestions is to impose a 1% tax on the sale of Internet-connecting devices including smart phones, computers, game consoles and e-book readers. This new tax is meant to replace the already existing tax on media used to store such content (CD, DVDs, memory sticks).

Another recommendation of the report seeks harmonization of the VAT treatment of physical copies and intangible electronic versions of cultural products, so that no distinction is made between them.

There is more to come and whatever the outcome, it will influence business decisions and consumer behaviors. If interested, watch carefully for more updates.

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