French court dismisses Google's €1.1bn back tax fine

Google Ireland was not liable to pay taxes in France, court rules

Google has won a significant victory against against French authorities after a judge ruled the company would not have to pay over 1 billion in back taxes.

After a six-year battle, a court in Paris finally decided that Google Ireland was not liable for corporation and value added back taxes during the 2005-2010 period, and dismissed a 1.1 billion fine.

French tax authorities maintained that Google should be subject to taxation as the company's subsidiary, Google Ireland, has been selling advertising to clients in France for years through its search engine.

Although the company employs more than 700 people in France, the court heard that as advertising contracts to display in France were booked through Ireland, it was not liable for a bill.

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Google does not have a "permanent establishment" in France, or sufficient holdings to justify a back tax bill, the court said in a statement, seen by Reuters. It added: "Google Ireland Ltd isn't taxable in France over the period 2005-2010."

The 1.1 billion tax fine was levied against the company after it paid just 6.7 million in French corporation taxes in 2015.

The attempted fine follows a string of crackdowns against large technology companies operating within Europe. The European Commission hit Google with a record 2.4 billion fine last month, finding the company had abused its dominant position as a search engine provider to promote its own shopping results.

The company also settled a 259 million tax bill in Italy earlier this year, which helped closed a criminal investigation into whether Google had avoided paying its fair share of revenue tax in the country over a 10-year period.

Google also paid 130 million to the UK treasury last year to end a long-running dispute over tax avoidance. Google paid just 20.4 million in UK taxes in 2013, despite posting sales of 3.8 billion.

French authorities have said they will be seeking to appeal today's decision, in a statement seen by Reuters.

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