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Monday 20 January 2020

Google agrees to € 945 million tax settlement with France

In a statement, Google confirmed the settlement and hailed the fact it had put an end to fiscal differences that it had had with France for numerous years

Paris: US internet giant Google has agreed a settlement totaling €945 million (US $1.0 billion) to settle a tax dispute in France under an agreement announced in court on Thursday. The company will pay a €500 million fine for tax evasion, as well as a further €465 million to settle claims with French tax authorities.

In a statement, Google confirmed the settlement and hailed the fact it had put an end to fiscal differences that it had had with France for numerous years. The settlement comes as France, as well as European allies, seek to find common ground with the US in a long-running dispute over the taxation of digital giants.

French Justice Minister Nicole Belloubet and Budget Minister Gerald Darmanin welcomed the “definitive settling” of all the contentious issues, adding in a statement that the outcome was the result of two years of intense work by the French authorities. “This outcome is good news for the public finances and fiscal fairness in France,” their statement said.

Belloubet said the settlement showed that the French authorities have the tools to ensure an equitable tax system. “It is a historic settlement both for our public finances and because it marks the end of an era,” Darmanin said. “By normalising Google’s situation in France, (the settlement) responds to our citizens’ demands for fiscal fairness,” he said.

French President Emmanuel Macron said alongside US President Donald Trump at the G7-Summit in August that leaders had reached an agreement on the taxation of tech giants, though the precise details remain to be worked out.

Google had joined Amazon and Facebook to testify at a US government hearing in August. The companies had testified against the French digital tax. The French government’s digital services tax had angered big tech companies in the US.

In July, the French senate had approved a 3% tax on revenues from digital services generated in the country. The tax will be effective, beginning January 2020. However, the tax will apply retrospectively from January 2019. Usually, taxes apply to company profits and not revenues.

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