Google May Have To Pay French Government $1.3 Billion

Forbes reported that Google could have to pay the French government up to $1.3 billion.

The Silicon Valley Journal wrote:

Mountain View-based Google said it has been hit with a tax assessment from French authorities that could cost between $693 million and $1.3 billion,  according to Forbes.

In a Securities and Exchange Commission filing, Google Inc. maintains that it has paid the taxes it owes, and expects to appeal the assessment. It is unclear, however, how successful such an appeal would be.

Forbes wrote that transparency in taxes and trade is a hot-button issue in Europe, as governments work to decrypt complex tax structures to pin down what multinational tech companies like Google and Apple Inc. owe.

The Huffington Post did an article back in 2013 on how most U.S. tech companies avoid paying taxes in Europe

Most big U.S. technology companies cut their tax bills by not declaring a tax residence in their main European markets, preventing tax authorities in those countries from even assessing their income, a Reuters analysis of hundreds of corporate filings shows.

Last week the Organisation for Economic Co-operation and Development (OECD) issued an action plan for tackling what it calls corporate tax avoidance. This has become a major political issue as citizens tire of paying higher taxes while companies often pay effective tax rates that are a fraction of statutory levels.

The OECD, which advises its mainly rich nation members on economic and tax policy, said it needed to assess how far companies in the digital economy use tactics like not creating a tax residence – or permanent establishment (PE) – in countries where they have major operations, to avoid paying tax where they do most of their business.

Business lobby groups such as the Business and Industry Advisory Committee, which focuses on the OECD, and Britain’s CBI have questioned how far companies use such techniques, suggesting widely publicized avoidance by big names such as Apple, Google or Amazon might be the exception. “It is unclear how significant this issue is,” the CBI said in an April submission to the OECD.