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.

Advertisement - Article continues below
Advertisement - Article continues below

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.

Featured Resources

How inkjet can transform your business

Get more out of your business by investing in the right printing technology

Download now

Journey to a modern workplace with Office 365: which tools and when?

A guide to how Office 365 builds a modern workplace

Download now

Modernise and transform your sales organisation

Learn how a modernised sales process can drive your business

Download now

Your guide to managing cloud transformation risk

Realise the benefits. Mitigate the risks

Download now

Most Popular

cloud computing

Google Cloud snaps up multi-cloud analytics platform for $2.6bn

13 Feb 2020

How to use Chromecast without Wi-Fi

5 Feb 2020
Microsoft Azure

Microsoft Azure is a testament to Satya Nadella’s strategic nouse

14 Feb 2020
operating systems

How to fix a stuck Windows 10 update

12 Feb 2020