French tax authorities are asking for 52 Million euros from Microsoft for what it refers to as ‘redressement social,’ essentially undeclared taxes that it declared via its Dublin-based European HQ between 2007 and 2009. Microsoft, who has already announced it will contest the claim, says that it legally registered all sales in Ireland, and delivered a 18% commission to Microsoft France, a commission which tax authorities in France say is far too low. Microsoft already contested a claim in 2005 about its activities between 1999 and 2001, according to BFM, which reported the story earlier this week.
Microsoft is just one among many multinational tech companies that have been hit with back taxes by the French government this past year. In December, we wrote about Yahoo! France being investigated for the mere 500K€ in taxes they paid on the 79 Million euros they made in annual revenue. Last summer, authorities raided Facebook France’s offices, and eBay and its subsidiary Paypal have also been targeted. We can’t forget the 252 Million dollars that Amazon was hit with in back taxes. And of course, there’s always Google.
Tax is certainly a big issue in Europe – as long as the member states try to hold together the European Union, there will be a problem around the misalignment of taxes across the member states. The UK hit Starbucks hard last years, and Starbucks gave in after clients began protesting the coffee chain over the lack of taxes it was paying, and Germany has also been hitting Google hard over taxes as well.
Interestingly enough, Comscore France just released their numbers on the most visited sites in January 2013 – looks like this is the list the French tax authorities are using to determine who to hit first.