Sarkozy addresses reporters at the G20 and G8 summit
France's President Nicolas Sarkozy proposes an financial tax to discourage speculation in the world commodities and currency markets. REUTERS

France will levy a 1 percent what it dubbed as ‘Google tax’ on online advertisements, effective January 1.

French parliament decided on Tuesday that the tax on France-based companies will be 1 percent of the net amount spent on online advertising.

The move was dubbed ‘Google tax’ as it was conceived as a direct tax on the search engine and its competitors.

President Nicolas Sarkozy had called for additional tax on Google and its competitors at the beginning of the year.

A deal for the 2011 national budget is being worked out by the parliamentary commission for some time and has already been approved by the two houses of parliament.

A compromise was reached after making considerable changes to the bill, pending a formal approval. The draft legislation is unlikely to be overturned.

Advertising Advertising Google Ads