France Open To Negotiated Tax Settlement With Google
France intends to appeal against a recent court decision in favor of Google in a major tax avoidance case, but is open to settling the dispute outside of court, a government minister has said.
In an interview with Les Echos, Minister of Action and Public Accounts, Gerald Darmanin, said that France will appeal the recent ruling because it is a “matter of principle.”
Earlier this month, the administrative court in Paris ruled that Google did not owe EUR1.1bn (USD1.3bn) in back taxes for the period 2005 to 2010 because it did not have a permanent establishment in France.
However, Darmanin said that Google has a 93 percent share of the internet search market in France, and that the profits generated from the company’s activities in the country “exceed the modest sums now declared.”
Nevertheless, the minister said France is open to the possibility that the tax dispute could be settled, because “nobody wants a lengthy litigation delaying tax collection.”
“If Google is prepared to enter into a sincere approach with the French Government to regularize its situation… our door is open,” Darmanin said.
The basis of the French Government’s challenge to Google’s tax position was that it paid minimal corporate tax in France despite deriving substantial revenues in the country during the period in question. It says that Google’s French income was routed to Ireland, where corporate tax is 12.5 percent, to avoid French corporate tax, which is currently 33 percent.
In reaching the verdict, judges agreed with the opinion of an administrative court adviser, who decided last month that Google was not liable for the EUR1.1bn back tax bill because the company did not have a sufficiently large physical presence in France.
