France seeks €1.6b in back taxes from Google

French tax authorities are looking to avoid the sort of tax deal made in the UK by hitting the search giant up for €1.6 billion in unpaid taxes.
Written by Chris Duckett, Contributor

France is seeking €1.6 billion ($1.76 billion) in back taxes from United States internet giant Google, which has been criticised for its use of aggressive tax-optimisation techniques, a source at the finance ministry has said.

"As far as our country is concerned, back taxes concerning this company amount to €1.6 billion," the official, who declined to be named, said on Wednesday.

A spokeswoman for Google France declined to comment. An unsourced 2012 media report mentioned a claim for €1 billion by French authorities, which Google denied at the time.

The tax authority usually issues at least one preliminary assessment before its final assessment, which can be challenged in court if not accepted, tax advisers said.

Earlier this month, Finance Minister Michel Sapin ruled out striking a deal with the US search engine company as the British government recently did, saying the sums at stake in France were "far greater" than those in Britain.

Google reached a £130 million settlement with British tax authorities for the period since 2005, which British politicians criticised on Tuesday as "disproportionately small".

In 2013, the United Kingdom government launched a parliamentary inquiry into Google's tax avoidance, following demands from the UK parliamentary Public Accounts Committee for Her Majesty's Revenue and Customs to look into Google's tax affairs. Google drew heavy criticism at the time for only paying $16 million in tax on turnover of $1.8 billion between 2006 and 2011.

In Australia, Google paid only AU$9 million in tax for 2014, despite revenue sitting at AU$357 million and pre-tax profit at AU$58.7 million.

Google, along with Apple, has drawn the ire of Australian authorities for using the so-called "Double Irish Dutch Sandwich" method of funnelling money through other countries from Australia in order to pay a lower tax rate.

From the start of 2016, multinational companies found to be avoiding tax in Australia will have to pay back the tax owed, plus a 100 percent penalty.

The laws are the Australian government's implementation of the recommendations from the Organisation for Economic Cooperation and Development (OECD) from its G20-commissioned base erosion and profit-shifting (BEPS) project. Under BEPS, the OECD expects to claw back as much as $240 billion in lost revenue each year through dodgy tax practices across the globe, which it claims represents up to 10 percent of global corporate income tax revenues.

In August, it was revealed that AU$31 billion was funnelled from Australia to Singapore in a year by 10 multinational companies.

"There has to be consequences for these companies, for what they're doing," Jason Ward, who was part of a coalition that sought Freedom of Information documents over corporate Australia's tax avoidance, said at the time. "It's not illegal, but it's completely immoral."

With AAP

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