Google to pay €1bn to end French tax probe

Evarado Alatorre
Setiembre 13, 2019

Google said on Thursday it agreed to pay 465 million euros in additional taxes to French authorities, boosting the total settlement to end a fiscal fraud probe in the country to almost 1 billion euros.

French investigators have since 2015 been investigating Google's tax set-up.

French Justice Minister Nicole Galoubet and Budget Minister Gerald Darmanin welcomed the "definitive settling" of all the contentious issues, adding in a statement that it was the result of two years of intense work by the French authorities.

Visitors pass by the logo of Google at the high profile startups and high tech leaders gathering, Viva Tech, in Paris, France May 16, 2019.

"It is a historic settlement both for our public finances and because it marks the end of an era", Darmanin said. "By normalizing Google's situation in France, (the settlement) responds to our citizens' demands for fiscal fairness", he said.

Google pays little tax in most of Europe by using a loophole in global tax law which involves transferring money through a Dutch front company into the tax haven of Bermuda.

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But leading European Union states like France argue that this is allowing tech giants to avoid paying sufficient taxes on the huge profits and sales they accrue in big countries outside where the tech giants are headquartered.

Due to tax loopholes surrounding digital earnings, Google is able to declare most of its earnings in Ireland where corporation tax in 12.5%.

The French government has eventually imposed its own unilateral tax, prompting U.S. President Donald Trump to brandish the menace of a retaliatory tax on French wine.

The settlement includes a €500m ($NZ862.8m) fine and additional taxes of €465m ($802.4m), but it is less than the tax bill authorities had accused Google of evading.

It rounds off a four year investigation that saw authorities raid Google's Paris headquarters in 2016.

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