France to pass law on new taxes for web giants by year-end - paper

A box from Amazon.com is pictured on the porch of a house in Golden, Colorado July 23, 2008.

PARIS (Reuters) - The French government will propose a law by year-end to change the way global Internet companies are taxed in France in a bid to counter what it sees as tax avoidance by Web giants like Google (GOOG.O) and Amazon (AMZN.O), according to a newspaper.

Les Echos newspaper, citing a Finance Ministry report entitled 'Taxation of the digital economy,' said the government would seek to tax the user data that web companies collect in the course of their businesses.

Companies like Google and Facebook (FB.O), for example, offer free services to users and then sell targeted advertising to companies based on the size of their audience.

"Since web companies pay little tax in France on their real business, the authors of the report recommend a taxation system that is based on the user data the companies exploit," the newspaper said in a version of its Friday edition posted on-line, without providing more specifics.

The government wants to move quickly on the proposals, the newspaper said, and could include them in its budget bill for 2014 that usually is submitted to Parliament in September. (Reporting by Leila Abboud; Editing by Dan Grebler)