By Alan Murray and Geoffrey Smith
July 13, 2017

Good morning.

A French court handed Alphabet a big victory yesterday, saying it doesn’t have to pay a $1.27 billion tax bill from the French tax administration. The ruling comes after a six-year fight over the fact that Google runs its French ad service out of Ireland, where it can take advantage of favorable tax rates. But the French tax court says Google Ireland doesn’t have a permanent establishment in France, and therefore can’t be taxed there.

The tax maneuvering of U.S. tech companies has become a hot issue in Europe. France’s finance minister on Sunday urged his European counterparts to do more to chase down taxes from the European operations of U.S. tech giants. “I have just come back from the G20 meeting in Hamburg and I can tell you the present age is not one for the weak,” Bruno Le Maire said at a conference. “When you are opposite Putin, Trump or next to Erdogan, then it is time for Europe to get a grip and defend its interests, making Google, Amazon and Facebook pay the taxes they owe European taxpayers.” Apple has the most at stake in this showdown, fighting a $14.8 billion tax bill from the European Union.

Meanwhile President Trump is in France to celebrate Bastille Day with new French President Emmanuel Macron. It’s not clear whether the tax issue will be addressed. While Trump is extremely unpopular in France, Time’s Vivienne Walt says no big protests are planned, in part, because so many Parisians have already left the city for their long summer vacations.

More news below.

Alan Murray



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