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No Pay Francais – Google Beat The French Government

It seems that Google are in the news a lot recently, typically having to hand over a cheque to some country or another for back taxes.

Well, it looked like they were getting ready to write out another cheque to the French Government, for around 1 Billion pounds, until a court ruling decided they didn’t have to pay a penny.

This time it appears Google took on the French government…and won, but will that be the end of it? I don’t think so.

So what is this all about exactly? Quite simply, the French government claim that Google owe over a billion in tax for the year 2005 up to 2010, and they were determined to get it.

However, Google have had their day in court, and a top judge has ruled in their favour, although many pundits have commented that it is strange that the search engine giant paid so little in tax during those years.

Just what is going on here? Who knows exactly, but what I do is that this isn’t the last time we will be hearing about Google and the subject of tax in the news.

It was only last year of course when Google reached a settlement with the UK government for 130 million in back taxes. Maybe that is where the French government went wrong…they should have asked for less.

This was always going to be a tough one for the French government if you ask me, because although Google did have an online presence in France during those years, they didn’t have any “permanent establishment” within the country, instead trading as Google Ireland Limited from their base in the Republic of Ireland, which is a subsidiary of their main company based in America.

Some experts argue that Google should have to pay taxes for those years, even if they didn’t have a physical address or place of business in France, while others argue that internet companies are different than traditional based businesses and the normal tax rules don’t always apply.

One thing I do know is that other big companies such as Apple and Amazon will have been watching this whole thing carefully, as they are also being investigated by the French authorities for back taxes.

Over the next few years I reckon that many of these tax matters are going to be a lot more straight forward, mainly because the European Parliament are about to pass new rules in regards to multi national companies and where they make their profits.

In other words, a company such as Google would have to give a detailed breakdown of exactly where every penny comes from, which would make it easier for countries such as France to know how much has been earned within their borders from internet customers.

Will the French government ever see any money for those back taxes? Something tells me they won’t, and if they do, then it will only be a small settlement, similar to what the UK government got last year.

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