The French government is reportedly demanding that Google pay €1.6 billion in back taxes, just one month after the UK government agreed to accept a mere £130 million over the same complaints.
Multinational advertising giant Google is a company not short of a bob or two, and one of the ways in which it keeps the coffers full is by taking advantage of every single tax loophole it can find - including the ones which are perhaps stepping over the line of legality. In the UK, the company was found to have been taking advantage of a circuitous profit transfer mechanism - whereby its UK income was diverted through an Irish subsidiary, from the Irish subsidiary to a Dutch subsidiary, then returning back to the Irish subsidiary - to keep its tax burden down. An investigation by Her Majesty's Revenue and Customs (HMCR) called shenanigans on the process, demanding that Google pay a more proper rate of tax on its UK earnings going forward but allowing it to get away with paying just £130 million in back tax - a saving estimated at around £1.67 billion.
The French government, though, isn't such a pushover. Investigating the same tax dodges as its UK equivalent, France's tax authority has been reported by Reuters as preparing to demand €1.6 billion in back tax payments - though this has not yet been officially confirmed by either the French tax authority or Google's local subsidiary.
If true, it would represent a far better deal for the French government than HMRC's extremely lenient demand on Google, and echo a statement made by French finance minister Michel Sapin which described the sums being discussed within his department as being far higher than those of HMRC's deal.
Multinational advertising giant Google is a company not short of a bob or two, and one of the ways in which it keeps the coffers full is by taking advantage of every single tax loophole it can find - including the ones which are perhaps stepping over the line of legality. In the UK, the company was found to have been taking advantage of a circuitous profit transfer mechanism - whereby its UK income was diverted through an Irish subsidiary, from the Irish subsidiary to a Dutch subsidiary, then returning back to the Irish subsidiary - to keep its tax burden down. An investigation by Her Majesty's Revenue and Customs (HMCR) called shenanigans on the process, demanding that Google pay a more proper rate of tax on its UK earnings going forward but allowing it to get away with paying just £130 million in back tax - a saving estimated at around £1.67 billion.
The French government, though, isn't such a pushover. Investigating the same tax dodges as its UK equivalent, France's tax authority has been reported by Reuters as preparing to demand €1.6 billion in back tax payments - though this has not yet been officially confirmed by either the French tax authority or Google's local subsidiary.
If true, it would represent a far better deal for the French government than HMRC's extremely lenient demand on Google, and echo a statement made by French finance minister Michel Sapin which described the sums being discussed within his department as being far higher than those of HMRC's deal.
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