13 Mar 2019 News

Nuova tassa video in Francia per Netflix e Amazon

A new video tax on international streaming platforms, both free and paid, operating in France, but financially registered abroad, should yield a profit of 10 million euros to the French film industry since its implementation on January 1, 2018, according to the Centre National du cinéma et de l’image animée (CNC). The CNC is part of the French Ministry of Culture and is responsible for the production and promotion of French cinema.

Digital platforms, such as Netflix, Apple, Google and Amazon, must pay a 2% video tax on their turnover. The proceeds, which according to the CNC president, Frédérique Bredin, amounted to 10 million euros in 2018, all went to the CNC, who will use it to finance French film and audiovisual contents.

The tax itself is an extension of an already existing tax. It was created in 1993 for VHS and DVD formats. In 2004, subscription-based VOD websites, pay-per-view services and video-sharing services that are fiscally established in France were included. The extension to include all platforms that distribute content in France and who are established in France or abroad had to wait for the approval of the European Commission. In 2017, when the extension was implemented, Frédérique Bredin stated that since the creation of the CNC, more than 70 years ago, the French ecosystem for the support of French original content has depended on one simple principle: that all broadcasters contribute financially to the creation of content in audiovisual and cinematographic production.

Frédérique Bredin sees online video platforms as a great opportunity, as long as they participate and finance creation in Europe, and in France. In fact, in an interview on the French radio France Info, Bredin stated that the introduction of streaming platforms had not deterred the French spectators from going to the movies. Going to the cinema remains a valued form of entertainment for the French population, as the CNC recorded more than 200 million movie theater entries in 2018. Bredin thus thinks that these new platforms should be integrated into the ecosystem to help finance new content in the industry, just as movie theaters and TV channels do. Theaters pay around 140 million euros to the CNC and TV channels around 290 million, according to Bredin in an interview for Le Figaro. The mere 10 million euros from the streaming platforms is therefore not much in comparison, especially considering that, for example, out of its 140 million international subscribers, Netflix has revealed that it has 3.5 million in France. Furthermore, online digital platforms are taxed on their turnover, and not their profit, which largely means that they are taxed on the advertising and sponsorship revenues broadcast on their websites and on the price paid by French consumers to access their audiovisual content.

International digital platforms are facing further taxation in France this year, as the GAFA tax has been introduced and is in effect from January 1, 2019. GAFA is the acronym for Google, Apple, Facebook and Amazon. The GAFAs will be taxed 3% on their turnover, which Bruno Le Maire, the Minister for Economy and Finance in France, believes will generate around 500 million euros, which would help fund new measures. The 3% tax applies to all digital services, operating in France but based either in France or abroad, that have a registered yearly total income above 750 million euros internationally, and 25 million euros in France. Spain, Italy and the U.K. have also made their own version of this GAFA tax. Bruno Le Maire hopes that this will become an EU-wide tax.

The CNC was, therefore, pioneering in its fight for the video tax. According to Gilles Fontaine on the French radio station France Inter, however, the way the CNC works has increasingly been criticized. Out of the 222 films supported by the CNC, only 33 reached over 500 000 theater entries. This is, though, only a relevant criticism if one values a film according to how many entries it made at theaters. For Numérama, the 2% video tax is not enough, as the journalist points out that it will only help to compensate for the decrease in revenue on DVD and VHS tax that has been falling since 2014.

by Forbes.com