France Passes "Traffic Tax," Netflix to Pay 5.5 Cents Per GB

French Parliament Approves Digital Data Tax Amendment

Paris, France – The French National Assembly narrowly approved an amendment to the 2027 budget bill on October 30th, proposing a new tax on digital data transmitted to French users. The amendment, put forth by Socialist Party lawmakers, passed by a slim margin of 11 votes to 10. If enacted, the tax would require content providers to pay €0.055 (approximately $0.06) per gigabyte of data sent to users in France. Major tech companies like Netflix, Google, and Meta would be among those affected.

The French government has voiced opposition to the proposed levy, and the amendment still faces a full budget vote in the National Assembly and review by the Senate before it can become law.

Details of the Proposed Digital Data Tax

The amendment, designated I-1358 within the 2027 fiscal law, was introduced by Socialist Party deputy Laurent Lhardit. The vote in the National Assembly saw only 21 deputies participating. According to data from France’s telecommunications regulatory authority, Arcep, French users consume approximately 200 billion gigabytes of data annually. Proponents of the tax estimate it could generate up to €10 billion (around $10.8 billion) per year.

The proposal specifically names Google, Meta, Amazon, Netflix, and Content Delivery Network (CDN) provider Akamai, stating these five companies account for half of the traffic measured by Arcep.

The French government’s revenue projections are significantly lower. David Amiel, Minister for Public Action and Accounts, estimated actual tax revenue to be around €5 billion. He also noted that half of this tax burden would fall on smaller companies outside the top five platforms, some of which are French firms.

How the Tax Would Work

The amendment designates the levy as the “tax on digital data producers” (taxe sur les producteurs de données numériques). Internet service providers would be responsible for tracking the volume of data transmitted to users and identifying the companies sending the data. French telecom operators such as Orange, SFR, Bouygues Telecom, and Free are expected to be involved in this measurement.

The collected statistics would be submitted quarterly to the French tax authorities (DGFiP), with oversight from both Arcep and the tax administration. The proposed legislation specifies that only the volume of data would be measured, not its content or destination. Traffic cached and delivered via CDNs would be calculated based on the total volume flowing from the CDN. Internet providers would report the data, but the tax would be paid by the content providers sending the data.

To mitigate potential impacts on certain industries, the tax includes caps: a maximum of 15% of a company’s revenue in France or 2% of its global revenue. The proposal’s explanatory notes suggest these caps are intended to account for the high data volumes generated by video streaming and gaming services. Companies without a physical presence in France would be required to pay the tax by March 30th of the following year.

Rationale and Potential Impact

Proponents argue that the current tax system struggles to capture profits from multinational digital platforms, whose earnings are often attributed to jurisdictions of their choosing. By using data traffic as the tax base, they contend that companies would be unable to shift this base abroad. The proposal also suggests that a per-gigabyte tax could incentivize companies to compress data.

Illustrative calculations suggest that downloading a game like “GTA 6,” estimated at 210GB, could incur a tax of approximately €11.55 per download. An hour of 4K Netflix content, around 7GB, would be taxed at nearly €0.40. High-quality music streaming, at about 150MB per hour, would incur a tax of less than €0.01.

This proposed tax is significantly higher than the wholesale transmission costs for data, which are fractions of a euro cent per gigabyte. France previously introduced a 3% “GAFA tax” in 2019, which companies like Amazon, Google, and Apple largely passed on to sellers, advertisers, and developers. Media outlets suggest that platforms like Netflix, whose revenue primarily comes from household subscriptions, might directly increase their subscription prices in France to offset this new tax.

Legislative Hurdles Ahead

The digital data tax amendment faced an earlier setback, having been rejected by the National Assembly’s finance committee on October 9th. Its subsequent approval in the full assembly is contingent on the National Assembly passing the first part of the budget bill (the revenue section), which the finance committee had previously rejected on October 23rd. If the full assembly also rejects this section, the Senate will review the government’s original budget proposal.

Even if the amendment clears the National Assembly, the Senate retains the power to remove it during its review of the budget bill. Therefore, the proposed tax remains an amendment within a budget bill and is not yet enacted law.

Frequently Asked Questions

Who would pay the French data tax?
The tax would be paid by content providers sending data, such as Netflix, Google, and Meta. Internet providers would be responsible for measuring traffic volumes. The tax rate is €0.055 per gigabyte, with a cap of 15% of a company’s French revenue or 2% of its global revenue.

Has the French per-gigabyte data tax taken effect?
No, it has not. This is an amendment to the 2027 budget bill, approved by the National Assembly on October 30th by a vote of 11 to 10, with government opposition. The revenue section of the budget bill must first pass, and the Senate could also remove this provision.