French issue Google with billion dollar tax bill

Google part of Alphabet pays little tax in most European countries because it reports almost all sales in Ireland

Google part of Alphabet pays little tax in most European countries because it reports almost all sales in Ireland

Google said on Thursday it agreed to pay 465 million euros in additional taxes to French authorities, boosting the total settlement to end a fiscal fraud probe in the country to almost 1 billion euros.

"We remain convinced that a coordinated reform of the global tax system is the best way to provide a clear framework for companies operating worldwide", Google said.

The settlement follows similar out-of-court agreements reached in Italy and Britain by Google in recent years, though the French agreement is much larger than the previous ones.

French Justice Minister Nicole Galoubet and Budget Minister Gerald Darmanin welcomed the "definitive settling" of all the contentious issues, adding in a statement that it 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", they said in a statement.

Belloubet said the settlement showed that the French authorities have the tools to ensure an equitable tax system.

Visitors pass by the logo of Google at the high profile startups and high tech leaders gathering, Viva Tech, in Paris, France May 16, 2019.

Google pays little tax in most of Europe by using a loophole in worldwide tax law which involves transferring money through a Dutch front company into the tax haven of Bermuda.

European countries have struggled to tax the profits of multinational tech companies derived in their jurisdictions.

France's tech tax provoked a rebuke from the White House, which said it could lead to USA tariffs on French imports.

The combined tax payment is less than the 1.6 billion euros the finance ministry had been seeking from Google after the company's Paris offices were raided in 2016.

The move on Google comes as the French government steps up its effort to more fairly tax the digital operations of companies.

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