Google will pay France €1 billion to end years-long tax probe

Google will pay France €1 billion to end years-long tax probe
Finance

Google will pay nearly €1 billion to French authorities to settle an ongoing investigation into its tax practices, according to The Verge. The payment includes a €500 million fine and tax payments of €465 million, still totaling less than the €1.6 billion Google was accused of failing to pay. 

Since 2016, authorities had been investigating whether the company had sufficiently reported its earnings in France, raiding the company’s Paris headquarters that year. 

It’s still a relatively small sum for a company the size of Google, which reportedly has been saving money specifically to pay a tax fine in France since 2014. It’s likely to have little impact on the company, which has been ranked as the world’s third most valuable firm at $309 billion (about €277 billion).

According to a statement from a company spokesperson:

“We have now settled tax and related disputes in France that have persisted for many years. The settlements comprise a €500 million payment that was ordered today by a French court, as well as €465 million in additional taxes that we had agreed to pay, and that have been substantially reflected in our prior financial results. We continue to believe that the best way to provide a clear framework for companies that operate around the world is coordinated reform of the international tax system.”

The company is headquartered in Ireland, which provides tax benefits thanks to its low corporate tax rate and a loophole in international tax law that allows almost all sales to be reported in that country, as long as sales contracts are concluded by staff based there. The company has allegedly been issuing advertising contracts from its Dublin headquarters for years. 

Until international tax law is reformed, France has instituted a direct tax on tech companies, on companies with more than €750 million in total global revenue and over €25 million earned in France. Those rules were put in place in July, but were backdated through the beginning of this year. 

Google was also fined €1.5 billion by the EU in March for blocking ads from competitors, and €4.3 billion last year, over use of its Android mobile operating system to illegally “cement its dominant position” in the online search engine market. 

Earlier this month, the US Federal Trade Commission said it would fine the company $170 million over violations of children’s digital privacy rules. 

Photo by www.outreachpete.com [CC BY 2.0 (https://creativecommons.org/licenses/by/2.0)]

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