France: Microsoft may face €600 mln tax payment

Tax authorities in France are reportedly seeking €600m in taxes from the local subsidiary of software giant Microsoft. The company paid €32.2 million in corporate tax in France last year, and billed French customers from its operation in Ireland, where business tax rates are considerably lower, the weekly L'Express reported on Wednesday.

In a statement, Microsoft said that it, "acts in accordance with the laws and regulations in all the countries in which it operates, working in close cooperation with local tax authorities to ensure complete compliance with local laws." The French tax authority declined to comment, citing its policy to not discuss individual cases.

During this year's Presidential election campaign, Emmanuel Macron pledged he would work to ensure internet firms pay appropriate French taxes on the business they conduct in the country.

It is not the first time that tax officials have targeted internet multinationals over their billing practices.

The 600 million euro figure is the second-largest amount France has sought in unpaid taxes from a high-tech multinational, after 1.1 billion euros recently sought from Google.
That case was similar as it concerned the billing of French clients via Ireland, which meant France did not collect revenue on the transactions.

However, in July a French court ruled in favour of Google in that case, considering that Google France didn't have a stable presence in the country and was only helping the Irish unit.
France's tax authority is appealing the ruling, but the government doesn't exclude a settlement.