The “YouTube tax" comes into force on 1 January 2018

In the Official Gazette dated 21 September 2017, the French government published decree no. 2017-1364 of 20 September 2017 designed to extend the tax on the provision of audiovisual content.

Up until now, the tax stipulated in article 1609 sexdecies B of the French General Tax Code was based on sales and rentals of video storage media (DVDs, Blu-ray, etc.) as well as the provision of "videos on demand” in return for payment. It was payable by persons located in France on operations aimed at end-users.

As announced in the 2016 Amended Finance Act, and following approval by the European Commission, the tax's application scope has been considerably widened:

• whether they come from paid-for or free online video sites, advertising and sponsorship revenues are now taken into account; and
• people based abroad carrying out operations aimed at French consumers are covered in the same way as operators located in France.

The tax is therefore being renamed the "tax on the distribution of audiovisual content in physical video or online format", more commonly known as the “YouTube/Netflix tax".

Its rate is fixed at 2%. It rises to 10% if the revenues come from the distribution of pornographic or violent content.

The legislation makes adjustments to take account of the specific activities of certain sites:

• operators providing free online access to audiovisual content benefit from an allowance of €100,000 on the taxable amount;
• for EU platforms sharing "amateur" content created by private users, a 66% reduction in the taxable amount is provided for;
• sites offering services to which the audiovisual content is secondary are exempt from the tax. It is aimed at operators whose main business concerns information or promotion of cinematographic and audiovisual works.

The purpose of the tax, which is passed on to the National Film and Moving Image Centre (CNC), is to help finance the creative arts in France. This assumes success in collecting the tax, including from distributors based abroad.