Google is not liable to pay a €1.1 billion tax bill in France after winning a reprieve in a Paris court, giving the internet giant a welcome boost just weeks after being fined by the European Commission(EC).
A Paris administrative tribunal ruled Google was not liable to pay the five years’ worth of back taxes sought by France’s tax authority because Google’s advertising sales business had no taxable presence in the country.
The issue, which related to Google’s activities from 2005 to 2010, had dragged on for more than six years, and The Wall Street Journal (WSJ) reported the decision in France could have implications for Google’s other tax battles in Europe and around the world.
In its ruling, the Paris court concluded Google did not illegally evade French tax by routing sales in the country through the Republic of Ireland, ruling Google’s European headquarters in the country could not be taxed if it also has a permanent base in France.
Google, which employs 700 people in France, stated the court decision confirms it “abides by French tax law and international standards”.
“We remain committed to France and the growth of its digital economy,” the company added.
Gerald Darmanin, France’s Minister of Public Action and Accounts, said the tax authority could yet appeal the decision, WSJ reported.
However, for the time being, Google’s victory somewhat eases pressure it recently faced across Europe.
The EC fined Google €2.4 billion two weeks ago after ruling the company abused its market dominance as a search engine, and illegally promoted its own shopping comparison website.
Google may reportedly face another fine in the EU relating to its Android operating system, and in 2016 was accused of stifling competition and innovation by EU competition commissioner Margrethe Vestager.
Other European countries have also attempted to claim back taxes from Google. Spanish authorities raided Google offices in 2016, while the company also agreed to pay €306 million in Italian back taxes earlier this year.
Source: Mobile World Live