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GOOGLE IS NOT liable for €1.115 billion in unpaid taxes claimed by the French state, a French court ruled today, saying the internet giant’s Irish subsidiary is not taxable in France.
“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.
The group employs 700 people in France but advertising contracts for its search engine or video-sharing website YouTube are signed with its Irish subsidiary.
The French claim was the latest in a series against the California-based group, which faces mounting legal problems in the EU.
European action has become increasingly aggressive against US technology giants Amazon, Facebook and Apple as well as Google.
The EU hit Google with a record €2.4 billion fine on 27 June for abusing its dominant position in the search engine business and illegally favouring its own shopping service over rivals.
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 today that it was weighing an appeal.
“The administration has two months to appeal these rulings and is already working to this end,” it said in a statement.
Economy Minister Bruno Le Maire had said Sunday: “It is time Europe got a grip and defended its interests, making Google, Amazon and Facebook pay the taxes they owe European taxpayers.”
The French claim was significantly higher than the amount Google agreed to pay Italian and British tax authorities over its tax arrangements with its Irish subsidiary.
In May, the group agreed to pay €306 million to Italian authorities. Last year, it struck a deal with Britain to pay £130 million (€170 million) for a decade of business, which was criticised at the time by opposition MPs as being too low.
The French claim was a fraction of the company’s annual profits: In April, Alphabet, Google’s parent company, declared a 29 percent jump in profit to $5.4 billion in the first quarter of 2017.
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Won’t have to pay it here either.
@Seán C: rightly so. Rules are rules.
@Seán C:
And if we tried to collect it they would just move to the next country that offered them similar terms.
It’s a basic tenent of international tax law, you pay the tax in the country the company is headquartered in. Unless every country changes to paying tax where the profit is earned nothing will change.
@P.J. Nolan: How do you define where the profit is earned? Take Coca Cols…is the profit made where it is bottled..or is it made where the secret syrup recipe is made? Does Apple make their profit where the R&D is done or where the stuff is manufactured, or whee the stuff is sold?
@Mary Murphy:
I wasn’t suggesting that it could be changed, a large company would need a separate set of books for each country and state it traded in, but it does give a large multinational an advantage over a local company.
@P.J. Nolan: I think you are missing my point. If each subsidiary company has their own books…how do you define where the profit was made? Take this example Apple does R&D in USA and all costs for R&D come to $20bio then imagine they have sales in USA of $ 20bio, therefor the US company makes zero profit? They sell 500 mio in Ireland….does that mean they make 500mio in Ireland as they did no R&D here? This is one tiny example, they get a lot more complicated. How about Apple sells me a tune on iTunes. Where is that sale made? I have iTunes on UK account with Irish bank card using a UK address but actually live outside the EU. The server for iTunes is located in say Vanuatu where they don’t charge corporate tax. Where is the profit made?
Ireland.. the Swiss bank account of the corporate world.
This is a very good ruling for Ireland.
FG don’t collect from big guns..
Just the small guy ..
How many people do Google employ in Ireland again? That’s right.
@Diarmuid: So what you’re saying is, if I hire loads of people I shouldn’t have to pay tax of billions on sales?
Interesting…Thought you Fianna Gaelers didn’t like scoungers or leeches?
6000 employees in Ireland and create many more indirect jobs resulting in thousands of Irish familys being supported, also Google employees are encouraged to set up hundreds of volunteer projects each year to help their local communities, I for one would like to work for them and l do hope they stay in Ireland for the sake of the Irish people they employ already, I for one don’t care what they do or don’t have to pay in France!
@John Gannon: That’s all true. Yet that shouldn’t stop them from paying tax on billions in sales, whatever the jurisdiction.
Giant corporations are amassing billions in wealth, but paying little in tax. It’s up to the employees to pay the tax, and that tax base is actually diminishing as wealth distribution is edging to one end of the scale only: the top.
We’re heading back to the days where kings and queens paid no tax, but their subjects did, for the privilege of having a king or queen. That social configuration did not work for the benefit of the society, only a select few.
Let Google, Apple and others make their billions. Let them pay their tax too. Even a have a minimum corporation tax of 1-2% on all earnings. Hardy much now is it?
You pay a few 10s of millions in lawyers and accountants fees, you avoid tax bills of billions, simple as that.
Up top. Result!
.well done eire. Keep the recovery going
Of course they won’t have to pay
Great news a real superb win for all of us I’m ecstatic.
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