Google pays $1 billion to settle French probe

Payment of about 1 billion euros ($1.10 billion) to French authorities to settle a fiscal fraud probe, agreed by Google. 

fiscal fraud probe began four years ago in a deal that may create a legal precedent for other large tech companies present in the country.

French investigators have been seeking to establish whether Google, whose European headquarters are based in Dublin, failed to pay its dues to the state by avoiding to declare parts of its activities in the country.

In a statement, Google said, the settlement comprises a fine of 500 million euros & additional taxes of 465 million euros.

Google, part of Alphabet Inc, pays little tax in most European countries because it reports almost all sales in Ireland. This is possible thanks to a loophole in international tax law but it hinges on staff in Dublin concluding all sales contracts.

The combined tax payment is less than the 1.6 billion euros the Finance Ministry had been seeking from Google after the company’s Paris offices were raided in 2016.

At the time, the Finance Ministry had ruled out settling with Google.

He added that, talks were underway with several other companies, big & small. He did not specify their names.

European countries have struggled to tax the profits of multinational tech companies derived in their jurisdictions.

French Govt. has pushed hard for a digital tax to cover European Union member states, but ran up against resistance from Denmark, Sweden, Finland & Ireland.

The Govt. of France has eventually imposed its own unilateral tax, prompting Donald Trump, U.S. President, to brandish the menace of a retaliatory tax on French wine.

Google said, “We remain convinced that a coordinated reform of the international tax system is the best way to provide a clear framework for companies operating worldwide".

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