French lawmakers approved a tax of €0.055 for every gigabyte of internet traffic

Internet users in France will likely pay more for their data plans as providers pass on the new gigabyte tax.

French lawmakers are considering a new tax on internet traffic, proposing a rate of €0.055 per gigabyte. This measure, introduced as an amendment (n°1358) to the 2027 budget bill, aims to generate an estimated €10 billion. The tax would primarily target major global digital content providers, who generate the vast majority of internet traffic directed to French subscribers. Proponents argue it would create fiscal equity between established physical businesses and large online retailers, and that the tax's design, based on physical data volume measured at network entry points within France, overcomes previous implementation challenges seen in countries like Canada and South Korea. The proposal emphasizes respecting net neutrality principles and claims technical, legal, and fiscal robustness. However, concerns have been raised by the rapporteur general about potential tax pass-through to advertisers and by the government minister about the complexity of measuring data flow and the potential burden on smaller French content providers.

The proposed French "data flow" tax signals a growing trend of governments seeking to capture revenue from digital services and data consumption, moving beyond traditional corporate or sales taxes. This approach could set a precedent for other nations grappling with taxing the digital economy and may accelerate the development of more sophisticated data metering technologies for network operators. The potential for a significant revenue stream could encourage further governmental interest in taxing digital infrastructure and services.

This tax could disproportionately affect consumers and smaller businesses reliant on significant data usage, despite efforts to target "globalized digital giants." If major providers pass on the costs, it could lead to higher operational expenses for French businesses that depend on cloud services or large data transfers. The debate also highlights the ongoing challenge of taxing cross-border digital activities and ensuring a level playing field between domestic and international tech companies.