France: tax non-EU companies for European data

France has suggested that the European Union should tax companies if they are transferring personal data outside of the bloc.

The move will target cloud companies but also those who outsource to call or data centres in foreign parts.

According to the LocalFrance has put forward several new ideas ahead of an EU summit next month.

One of them is that governments bring in new tax rules that would require non-European internet companies to pay taxes in Europe on profits earned there.

The introduction of tax rules for digital companies would ensure that profits they generate in Europe are subject to taxation and the revenues shared among the member states, according to a French briefing document.

The idea is that it will close tax structures that have allowed companies like Amazon and Google to pay little tax in most European countries.

This is a hot button question given the austerity policies governments across Europe are implementing, British MPs carpeted internet company executives over their tax avoidance schemes, although they appeared to be legal means through loopholes.

Another proposal France suggested was the taxing data transfers outside of Europe.

The transfer of personal data outside the EU is highly regulated but it still happens when companies outsource certain tasks, such as customer sales and help lines to offshore call centres.

If such activity is taxed then companies would have no compelling reason to offshore their data and call centres. Of course, it would be a major headache to police.