France set to tax smartphones to protect culture in digital age

French Members of Parliament use tablets or smartphones as they attend a weekly session of questions to the government at the National Assembly in Paris

Story highlights

  • The proposal was made in a government-commissioned report that was broadly endorsed by Hollande
  • The country has long had a system for funding film-making via taxation on television companies
  • The report said it was legitimate for the authorities to intervene to "correct excessive imbalances"

France is preparing to tax smartphones, tablets and all other internet-linked devices to help fund the production of French art, films and music.

The proposal was made in a government-commissioned report that was broadly endorsed by President François Hollande's socialist administration.

In a trenchant defence of France's "exception culturelle" in the digital age, the report proposed imposing a tax of up to 4 per cent on the sale of all devices, including gaming consoles and e-readers, that allow access via the internet to "cultural content".

"Companies that make these tablets must, in a minor way, be made to contribute part of the revenue from their sales to help creators," said Aurélie Filippetti, culture minister. The new tax could be included in next year's budget, she added.

The report said it was legitimate for the authorities to intervene to "correct excessive imbalances" in the digital economy. "They can use taxation to make actors that don't directly exploit content, but which profit from its circulation, contribute to its creation."

But DigitalEurope, which lobbies in Brussels for smart phone makers such as Apple and Samsung, said the tax was "a move in the wrong direction".

Pierre Lescure, a former head of Canal Plus, the television channel, was commissioned by Mr Hollande to make recommendations on how France should adapt its commitment to preserving French-language culture in the fast-changing digital era.

The country has long had a system for funding film-making via taxation on television companies and other distributors and enforces quotas on French music on broadcasters. Mr Lescure said this was under "immense threat" by the domination of big international actors that can now circumvent such protections.

Mr Hollande, who has insisted "l'exception culturelle" must be excluded from forthcoming trade negotiations between the EU and the US, said in a statement welcoming the Lescure report that he was "fundamentally attached to the defence" of French culture.

Ms Filippetti said a smartphone tax would be at a "very low level". The report said it would have to be kept low to avoid punishing consumers and provoking a black market. It said an initial tax of 1 per cent would raise €86m, but this could be raised to 3 or 4 per cent. It pointed out that it would not hit jobs in France as the companies affected employed few people in the country.

France already raises almost €200m a year in copyright levies imposed by many EU countries on hardware storage to compensate artists for the loss of income through private copying.

The smartphone tax was one of 80 proposals included in Mr Lescure's 500-page report. They included substituting an existing levy on French telecoms operators that helps subsidise film-making with a new tax based on their revenues.

It proposed scrapping a system introduced under former president Nicolas Sarkozy that imposes penalties and a ban on internet connection for those guilty of illegal downloading. It also called for much shorter statutory delays in the release to video of films and foreign television series to combat pirating.