France's Hollande slams Internet giants on tax

Feb 06, 2014
French President Francois Hollande (C) visits the headquarters of the online retail company 'Vente-privee.com', in Paris, France, on February 6, 2014

President Francois Hollande said Thursday that France would not continue to tolerate the tax optimisation strategies used by multinational Internet giants like Google.

"This is not acceptable and that is why, at both the European and the global level, we must ensure that optimisation... can be called into question," Hollande said on a visit to the offices of Internet sales company vente-privee.com in the Paris suburbs.

His comments follow reports that France is seeking one billion euros ($1.36 billion) in tax from Google over its fiscal strategies.

"Everyone must be in the same competitive situation, including on the fiscal level," Hollande said.

"When I go to the United States in a few days, we have agreed with President (Barack) Obama to make this effort on tax harmonisation," he said.

Hollande is making a state visit to the United States from February 10 to 12, during which he will meet with major tech firms including Google, Facebook and Twitter in Silicon Valley.

Magazine Le Point reported on Tuesday that Paris has decided to make the claim against Google, though neither the company nor tax authorities would confirm it.

France is one of a growing number of nations to pursue more aggressively what they see as abuse of tax and accounting rules that allows some multinational companies to pay less tax.

French tax inspectors searched Google's Paris offices in June 2011 as it opened a probe into how the company implements transfer pricing between its different units—a strategy many multinationals use to shift revenue and tax liability between countries.

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

According to court documents obtained by AFP, Google France reported revenue of 192.9 million euros in 2012, and paid 6.5 million euros in tax on the 8.3 million euros of net profit it earned.

Industry analysts estimate that Google generated between 1.25 billion and 1.4 billion euros in revenue in France in 2011, mainly from Internet advertising.

Last year the Group of 20 advanced and developing nations endorsed an action plan to clamp down on tax avoidance which its creators say could lead to the biggest change in the global tax system since the 1920s.

France is also involved in a battle over $252 million dollars of disputed back taxes with online retailer Amazon, which channels all its European earnings through Luxembourg to take advantage of the Duchy's low corporate tax rates.

Starbucks came under fire over a complex pan-national company structure that enabled it to declare its operations in Britain to be non-profitable for years despite a huge network of coffee outlets.

A 'shaming' campaign by lawmakers resulted in the company paying corporation tax in Britain last year for the first time in five years.

Explore further: 'French to make 1 bn euro tax claim against Google'

add to favorites email to friend print save as pdf

Related Stories

'French to make 1 bn euro tax claim against Google'

Feb 04, 2014

French authorities have decided to make a tax claim of 1 billion euros against Google following a probe into the tax strategies by the US Internet giant, Le Point magazine reported Tuesday.

Google loses appeal against French tax searches

Nov 02, 2012

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 ...

Google chairman hopes for France tax deal soon

Nov 05, 2012

Google chairman Eric Schmidt said Monday he hopes his firm will reach a settlement "by the end of the year" with authorities in France in a billion-dollar dispute over taxes.

French authorities probe Google's tax bill

Mar 20, 2012

French authorities are probing Google for potential tax avoidance, a source close to the matter said Tuesday, with the US Internet giant facing a possible bill of over 100 million euros ($132 million).

Google 'open to mediation' in France revenue row

Nov 06, 2012

Google said on Tuesday it was open to the idea of appointing a mediator to help end its bitter row with French news media sites that want to make the US Internet giant pay to display links to their content.

Recommended for you

German court lifts ban on Uber car pick-up service

5 hours ago

The controversial but popular car pick-up service Uber claimed a victory in Germany on Tuesday when a court threw out an injunction levelled against its operations in Europe's biggest economy.

Oligarch buys Russia's most popular social media (Update)

7 hours ago

A media company owned by Kremlin-friendly oligarch Alisher Usmanov has splashed out $1.5 billion to gain full control of Russia's most popular social network, VKontakte, bringing an end to a months-long dispute ...

User comments : 0