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France to postpone 'Google Tax' on online ads

The French government says it will postpone implementing its so-called "Google Tax" on internet advertising until the middle of next year.

world Updated: Dec 15, 2010 20:48 IST

The French government says it will postpone implementing its so-called "Google Tax" on internet advertising until the middle of next year.

Budget Minister Francois Baroin says the 1% tax on online ad spending will come into effect July 1 instead of January 1 as initially planned in the 2011 budget bill being voted on in parliment on Wednesday.

The government wants more time for negotiations with advertisers and websites on how the plan will be implemented. The tax is to be levied on France-based advertisers, not on Google. The government expects it to raise euro20 million ($26.7 million) a year.

The move comes after French regulators said they had uncovered "possible" abuses by Google Inc. in its online advertising practices because of its dominant market position.