Google May Be $1 Billion Behind In Tax Payments To France

An anonymous reader writes "Ars Technica reports, 'Technology giant Google has been delinquent on its tax payments in France for the past few years, to the tune of more than $1 billion in missed payments, and it now may be hit with a sizable tax penalty by the French government.' Google asserts that it has operated within the law in France, but the French government has reason to believe that in order to avoid French taxes, Google has been passing off some of its business contracts as Irish rather than French."

Comments

$1B? That's nothing!

[Anonymous Coward]

Ever heard of the Double Irish and a Dutch sandwich?
The City of London has established a world-spanning network of tax heaven states, mostly consisting of former parts of the english empire. Big corporations use this system to not pay taxes, and the sums involved exceed 1$B by far.

Same tricks played in UK

[whoever57]

Google has played the same tricks in the UK. Google claims that the sales are made in Ireland, while employing many people in the UK whose job titles includes sales. I expect there are Google employees in France and UK (and most other European countries) who get sales commissions for sales "made" in the Ireland.

Re:So few

[kesuki]

you didn't provide links verifying your points. without links it is too hard for the people who regularly get mod points to mod positive, because if you want a soap box on slashdot you should use their journal system. having read the definition of austerity measures it is clear that the usa is also using austerity measures... the world is a complex place, though.

"After the french government committed to economic suicide with austerity policies" http://en.wikipedia.org/wiki/Austerity In economics, austerity describes policies used by governments to reduce budget deficits during adverse economic conditions. These policies may include spending cuts, tax increases, or a mixture of the two.[1][2][3] Austerity policies may be attempts to demonstrate governments' fiscal discipline to their creditors and credit rating agencies by bringing revenues closer to expenditures; they may also be politically or ideologically driven.

In macroeconomics, reducing government deficits generally increases unemployment in the short run.[4] This increases safety net spending and reduces tax revenues, partially offsetting the austerity measures. Government spending contributes to gross domestic product (GDP), so reducing spending may result in a higher debt-to-GDP ratio, a key measure of the debt burden carried by a country and its citizens. Higher short-term deficit spending (stimulus) contributes to GDP growth particularly when consumers and businesses are unwilling or unable to spend. This is because crowding out (i.e., rising interest rates as government bids against business for a finite amount of savings, slowing the economy) is less of a factor in a downturn, as there may be a surplus of savings.[5][6]

Re:So few

[PopeRatzo]

In some countries, maybe there's some blame to be had for escaping taxes...but France is a whole other argument. I mean shit, 75% tax on the wealthiest has resulted in a lot of them just flat out leaving that country. It got so bad that their dear leader is now lobbying against his own tax plan; the same plan that put it there to begin with.

What do personal tax rates have to do with a corporation paying corporate taxes? There are no "75%" corporate taxes in France?

A corporation has a choice in whether or not to do business in a country. Google has no problem doing business in countries with regimes with a lot worse policies than a 75% top personal tax rate.

Re:So few

[davester666]

Actually, it really appears that Google was blatantly NOT following the law.

Apple sells an iPhone and says X% of the value of it is for patents to be paid to an Irish company [or something like that], which is completely legal, even if it is also completely arbitrary [as Apple owns said patents] so they basically shift most profits out of the country. Everybody and their dog does this, Apple just headlines this because they are a relatively new company [vs say, petroleum companies] and they make highest amount of profit [or thereabouts] worldwide.

Google has a large office of employee's in France, that were involved with negotiating and signing advertising contracts with french companies, then claiming those contracts were actually signed IN IRELAND. This is the part that the tax collectors are taking issue with. To be legal and not have to pay taxes in France for those contracts, Google would basically have to close their french offices and get everyone to directly deal with their Irish division.

And I believe I saw a similar story about the UK also investigating Google doing this in the UK as well. And I'm sure all the other tax collection agencies in the EU have perked up their ears and started taking a look at this...