Google will Not have to Pay 1.1 Billion Euros in Taxes to the Tax Authorities

Google will not have to pay 1.1 Billion euros in Taxes

ECONOMY: The State, however, could appeal the decision …

“The Irish company Google Ireland Limited (GIL) is not taxable in France over the period 2005 to 2010.” Here is the key sentence in the decision of the Paris Administrative Court, which ruled in favor on Wednesday to US giant Google in its standoff with the IRS. Suddenly, the California company escapes to a tax adjustment of 1.115 billion euros, taking advantage of legal uncertainty on taxes of companies based in Europe.

The State reported on Wednesday evening that it planned to appeal the decision. “The administration has two months to appeal these judgments and already working in this direction,” said the Ministry of Public Accounts in a statement.

According to the court, it is the subsidiary of the US group in Ireland which is responsible for commercialization in Europe of online advertising correlated to the famous search engine. Google France provides for its part, “under a contract with GIL, commercial assistance and French Customer Council,” the French advertisers are considered direct clients of the Irish subsidiary, said the court.

No “permanent establishment” in France

The administrative court found, as already suggested by the rapporteur public on June 14, Google does not have a “permanent establishment” in France, because the French subsidiary could legally commit GIL, the posting of advertisement orders by French customers being validated in Ireland. GIL escapes accordingly the corporate tax and withholding tax in their judgment.

“After a thorough review by the public rapporteur, the Paris Administrative Court confirmed that Google respects French tax rules and international standards. Our investment in France remains, and our commitment to serving its numerical growth, “responded Wednesday the US group, in an email to AFP.

A very political issue

In his campaign program of the presidential election, Emmanuel Macron promised to “impose major Internet groups on their turnover in France” and “the creation of a digital single market in Europe.” The Secretary of State for Digital Mounir Mahjoubi, had for its part called for mid-May the major platforms of the Internet to pay a “fair and balanced” tax in Europe, which put them level with national stakeholders .

And as recently as Sunday, the Minister of Economy and Finance Bruno Le Maire urged Europe to “pay” the American giants of net taxes on the continent. “It is time for Europe to act together, she defends her interests, she does pay Google, Amazon and Facebook taxes they owe to European taxpayers,” he said of the economic meetings ‘Aix en Provence. Obviously, tax justice wait.


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