Google escapes 1.1 bn euro tax bill in France
PARIS: Google is not liable for 1.115 billion euros ($1.272 billion) in unpaid taxes claimed by the French state, a French court ruled Wednesday, saying the internet giant's Irish subsidiary is not taxable in France.
"The French company Google Ireland Limited (GIL) is not taxable in
France for the 2005 to 2010 period," the court ruled.
Google paid just 6.7 million euros in corporate taxes in 2015 in
France by booking revenues for its online empire at its European subsidiary in
low-tax Ireland, a legal loophole prized by multinationals.
The group employs 700 people in France but advertising contracts
for its search engine or video-sharing website YouTube are signed with its
Irish subsidiary.
The French claim was the latest in a series against the
California-based group, which faces mounting legal problems in the EU.
European action has become increasingly aggressive against US
technology giants Amazon, Facebook and Apple as well as Google.
The EU hit Google with a record 2.4 billion euro fine on June 27
for abusing its dominant position in the search engine business and illegally
favouring its own shopping service over rivals.
In 2016, European competition chief Margrethe Vestager shocked
Washington and the world by ordering iPhone manufacturer Apple to repay 13
billion euros in back taxes in Ireland after paying a near-zero rate of tax
some years.
Newly elected French President Emmanuel Macron promised to get
tough on US internet giants during his campaign, seeing their low tax rates as
a source of resentment about globalisation and unfair on European companies.
The government's public accounts ministry said later Wednesday
that it was weighing an appeal.
"The administration has two months to appeal these rulings and is
already working to this end,” it said in a statement.
Economy Minister Bruno Le Maire had said Sunday: “It is time
Europe got a grip and defended its interests, making Google, Amazon and
Facebook pay the taxes they owe European taxpayers.”
The French claim was significantly higher than the amount Google
agreed to pay Italian and British tax authorities over its tax arrangements
with its Irish subsidiary.
In May, the group agreed to pay 306 million euros to Italian
authorities. Last year, it struck a deal with Britain to pay £130 million (170
million euros) for a decade of business, which was criticised at the time by
opposition MPs as being too low.
The French claim was a fraction of the company’s annual profits:
In April, Alphabet, Google’s parent company, declared a 29 percent jump in
profit to $5.4 billion in the first quarter of 2017.
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