Quick follow up on last week’s blog on the recent unilateral French cuts to VAT on digital services (the blog was featured by Kamal Ahmed in this week’s Sunday Telegraph).

I was interested to see a report in today’s Financial Times that, as part of his state visit to the US, President Hollande has taken the time to go to the technological centre of the US economy, Silicon Valley. According to the FT, one reason for the President’s interest in the Valley is the large number of French tech experts who have moved out there:

There are now 60,000 French nationals in California, one of the biggest French diasporas. The French government is concerned both to sustain links with what otherwise might become a damaging brain drain and to persuade US companies that France itself is a good place to invest, despite its reputation for interventionism, high taxes and stifling labour regulations.

I was in Paris with French colleagues just last week, meeting our friends and partners at Ecommerce Live, and got to appreciate both the vibrancy of the French digital scene, and the commercial barriers French businesses have to contend with.

M. Hollande has – against EU regulation – maintained the VAT cut on ebooks and proposed a major cut to VAT on digital newspapers. He wants those 60,000 French technological wizards back in the country, paying taxes, and contributing to the development of France’s own digital economy. The VAT cuts look like part of a deliberate strategy to help him achieve that aim.

By |February 12th, 2014|