Google won the legal fight in France over $1.3 bln tax bill

8 years ago - Published in Finance, Fiscal & Legal

Google emerged on Wednesday as the victor in its latest legal battle in Europe, after a French court said the technology behemoth did not have to pay $1.3 billion in back taxes.

At issue was whether Google had avoided taxes in France by routing sales in the country through an Irish-based subsidiary over a five-year period ending in 2010.

“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 in corporate taxes in 2015 in France by booking revenues for its online empire at its European subsidiary in Ireland, which has a lower tax rate.

Google said in a statement the ruling "has confirmed Google abides by French tax law and international standards," adding, "We remain committed to France and the growth of its digital economy."

The ruling is a victory amid a series of legal challenges Google has faced across Europe on concerns including taxes, competition and privacy.

Last month, the European Union slapped Google with a 2.42 billion euro ($2.72 billion) fine for favoring its own shopping services in its search results over those of rivals. The fine is the biggest antitrust penalty the EU has ever applied to a single company, exceeding the $1 billion fine handed to Intel in 2009.

The EU bureaucrats are also considering another case over Google's Android mobile operating system and yet another one over its AdSense dominance.

European action has become increasingly aggressive against US technology giants Amazon, Facebook and Apple as well as Google.

In 2016, European competition chief Margrethe Vestager shocked Washington and the world by ordering iPhone manufacturer Apple to repay €13 billion 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 that it was weighing an appeal.