Finally, some sort of breathing space has come for Google as the tech giant finally reached a settlement with the French tax authorities. Following a long probe that has spanned the last four years or thereabout, Google is now expected to pay [or has paid] $1.1 billion for not fully declaring its tax activities in the European country.
“We have now settled tax and related disputes in France that have persisted for many years. The settlements comprise a €500 million payment that was ordered today by a French court, as well as €465 million in additional taxes that we had agreed to pay, and that have been substantially reflected in our prior financial results,” Google said in a statement per Engadget. “We continue to believe that the best way to provide a clear framework for companies that operate around the world is co-ordinated reform of the international tax system.”
Trouble started for Google when the French authorities sought to investigate its failure to pay its dues to the country by avoiding to declare parts of its activities in the European country. Google, whose headquarters for Europe is based in Europe, pays only little tax in most European countries because most of its sales are recorded in Ireland.
In May 2016, Google’s Paris headquarters was raided on issues bothering on tax. Google, according to French investigators, was at the time being investigated for aggravated financial and organized money laundering issues.
Authorities sent dozens of tax officials to search the offices of the search engine giant at 8 Rue de Londres, Paris. Their mission was to uncover evidence of tax fraud and failure to declare full extent of its business activities in the European country. Authorities were then investigating Google for issues that bothered on allegedly owing France back taxes as well as to establish if the company was trying to evade French tax law.
Google’s argument was hinged on the fact that its large offices in Paris, London and other cities in Europe are not fully fledged businesses. The company added that they (offices in European capitals) merely act as satellites of its Irish office in Dublin—which also serves as its international headquarters.
The Wall Street Journal, however, quoted an official of the company as saying that French law were fully being complied with. “We are cooperating with the authorities to answer their questions. We comply fully with French law.”
Authorities at the time invaded the Google office in France because they wanted to have a clearer view of what was exactly being done at 8 Rue de Londres—and sending in dozens of tax investigators to comb the offices could be of help. Perhaps, this could have been done without raising much dust—request for some documents without sending dozens of men was my view at time; but at least the authorities did not return with empty hands.