Google loses appeal against French tax searches

Nov 02, 2012
Google's executive chairman Eric Schmidt arrives at the Elysee Palace for a meeting with French President on October 29 in Paris. A Paris appeals court has rejected a request by Internet search giant Google to invalidate the search and seizure of documents by French tax authorities, according to a copy of the decision obtained by AFP.

A Paris appeals court has rejected a request by Internet search giant Google to invalidate the search and seizure of documents by French tax authorities, according to a copy of the decision obtained by AFP on Friday.

The court rejected Google's arguments against the 2012 tax raid and ordered the US company to cover legal expenses for the appeal.

According to news weekly Canard Enchaine, French tax authorities have made a billion-euro ($1.3 billion) claim against Google over financial transfers between Google's Irish and its French unit for four tax years.

Google France told AFP this week that it had received no such tax claim, and that it complies with tax laws in all the countries in which it operates.

According to the court decision dated August 31, the French tax authorities believe that "the company Google Ireland Limited in practice carries out commercial activities in France using the human and material resources of the company Google France, without making the corresponding tax declarations."

Google reduces the amount of tax it pays in France by funneling most revenue through a Dutch-registered intermediary then to a Bermuda-registered holding Google Ireland Limited, before reporting it in low-tax Ireland.

According to estimates, Google generated between 1.25 billion and 1.4 billion euros in revenue in France last year, primarily from . It paid only a little more than 5 million euros in tax however.

Google also rejected a report by the Canard Enchaine that the tax issue was brought up during a Monday meeting between French President Francois Hollande and Google chief .

The weekly said the tax claim was being used to pressure Google to compromise in a dispute over compensation to French news media websites.

The websites want the search engine to hand over a percentage of Google earns from directing users to their .

Google has threatened it would remove French media websites from its search results instead of handing over a share the advertising revenue.

Hollande has warned France will adopt a law to settle the dispute if fails to reach an agreement with French media by the end of the year.

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User comments : 6

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Caliban
2.3 / 5 (3) Nov 03, 2012
All the hipster gloss aside, Google looks just like any other greedy, tax-dodging, offshoring corporate behemoth.

"Don't be evil", indeed.

GaryB
2.3 / 5 (3) Nov 03, 2012
All the hipster gloss aside, France looks just like any other greedy, graft sucking, pocket lining governmental behemoth.
AngryMoose
1 / 5 (1) Nov 03, 2012
France don't like it? See how you like the Internet without google! (not really how I feel, maybe how I would respond though)
Oysteroid
1 / 5 (1) Nov 03, 2012
And the irony of it? French Socialist president to the defence of evil Corporate media (French of course). All the way to threatening with new laws specifically for that.
ValeriaT
5 / 5 (1) Nov 03, 2012
See how you like the Internet without google!
It would look like the Internet with Bing. I can see absolutely no problem here. Using Bermuda-registered company for evasion of taxes is rather poor tactics even for Google.
hopefulbl
not rated yet Nov 05, 2012
do all search engines have to pay the french, or only google? What about bing, yahoo, etc???

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