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French courts surrender to Google

by on13 July 2017


American megacompanies are tax-free


Google won its fight against $1.3 billion French tax bill after a court rejected claims the search engine giant abused loopholes to avoid paying its fair share.

The judges ruled that Google’s European headquarters in Ireland can’t be taxed as if it also has a permanent base in France, as requested by the nation’s administration. Google didn’t illegally dodge French taxes by routing sales in the country out of Ireland, the Paris administrative court ruled.

“Google Ireland isn’t taxable in France over the period 2005-2010,” the court said in a statement. French tax administrators did not respond to requests for comment.

It is not the end of the French investigations. In a separate investigation French prosecutors raided the Alphabet unit’s Paris office in May 2016 after months of preparation spent offline to prevent leaks.

That ongoing probe seeks to verify whether Google’s Irish unit has a permanent establishment in France and whether the firm failed to declare part of its income in the country.

But for now Google can claim that the French Administrative Court of Paris has confirmed Google abides by French tax law and international standards.

Authorities across the continent have been trying to claim a slice of the billions of dollars of profits Google’s owners kept out of their grasp using techniques known as the Double Irish and the Dutch Sandwich. To end a dispute spanning 14 years, it recently struck a 306 million euro settlement with Italian tax authorities.

Paris judges ruled that the conditions to tax Google Ireland as if it had a permanent establishment in France were not met as Google France didn’t have the sufficient autonomy from the Irish headquarters.

The court said this was shown by the fact that Google France’s employees could not accept online advertising requests from local clients, with all orders needing approval from the headquarters in Ireland.

Last modified on 13 July 2017
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