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France ambitiously seeks 1.6 billion euros from Google in back taxes

Wed 24 Feb 2016

A source at the French finance ministry has apparently revealed that France will seek 1.6 billion euros ($1.76 billion) from Google in back-taxes, in the wake of the internet giant’s controversially small payment of tax in the UK.

The news comes in the wake of widespread criticism at Google’s agreement with the UK to pay a mere £130 million in back taxes for its activity in the country in the years 2005-15, despite an estimated $7 billion in turnover for the 2015 period alone, and the fact that the UK is Google’s second-largest market.

The French official Reuters cites said “As far as our country is concerned, back taxes concerning this company amount to 1.6 billion euros.” According to tax advisers, the amount can be challenged in court before the final assessment is made.

The French Finance Minister Michel Sapin made the news earlier in the month with outspoken criticism of the UK’s final tax agreement with Google, commenting that it “seems more the product of a negotiation than the application of the law.” In the same period Sapin told a conference in Paris (according to the Financial Times) “The French tax administration does not negotiate the amount of taxes owed. It applies the rules.”

Towards the end of 2014 Google chief executive Larry Page met with French Prime Minister Manuel Valls to reaffirm Google’s commitment to “continue investing in France”. The declaration, however, has an undertow of menace considering that at that point the search giant was already embroiled in tax negotiations which were certain to result at an initial cost of over 1 billion euros.

French Deputy Minister for Digital Affairs Axelle Lemaire commented at the time “France is not anti-Google. But when you look at the profit that they make in France, and the number of customers they have, and the tax they pay, it’s outrageous.”

If France were to win even half of the sum that it’s now said to be seeking from Google, the United Kingdom seems likely to come in for quite extraordinary criticism across the board for what many have labelled a ‘sweetheart deal’ over tax, and one apparently founded on the Reagan-ite notion of trickledown economics.


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