France Is Ready to Negotiate With Google Over Back Taxes

Jul 24, 2017

France is ready to negotiate a deal with Google over back taxes, budget minister Gerald Darmanin told financial daily Les Echos on Monday.

A French court ruled this month that Google was not liable to pay 1.1 billion euros ($1.3 billion) in back taxes demanded by French authorities.

Though Darmanin had announced previously that the government would appeal against that ruling he told Les Echoes: "Nobody wants a long legal process that delays the recovery of back taxes. If Google is ready for sincere talks ... our door is open."

Reuters was unable to contact a Google France representative for immediate comment outside business hours.

The French finance ministry considers that the U.S. company had declared in Ireland advertising revenue earned in France and had thus avoided paying corporate tax and value-added tax.

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However, the Paris administrative court ruled on July 12 that Google Ireland Limited was not subject to corporate and value-added taxes for the period 2005-2010, striking down the tax administration's demands for back payments.

The ruling in favor of Google, now part of Alphabet Inc, followed a court adviser's recommendation that Google did not have a "permanent establishment" or sufficient taxable presence to justify the bill.

Darmanin rejected that interpretation, telling Les Echos that "the profits really generated in our country surpass the modest amounts that are declared."

"Our target is to receive the tax income that corresponds to the real activity of Google in France," Darmanin was quoted as saying, adding that other companies in a similar situation could also start talks with the ministry.

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