France is getting ready to hit Google with a massive tax bill, according to reports.
It’s ten times more than the recent tax deal Google made with Britain for £130 million in back taxes — and is likely to further inflame criticisms of the UK’s settlement and the company’s tax practices in Europe.
Britain is Google’s second-biggest market after the US.
An official at the French finance ministry told Reuters that “as far as our country is concerned, back taxes concerning this company amount to 1.6 billion euros.”
And a source told AFP that “in regards to France, a 1.6 billion euro adjustment has been imposed on the company.” But they added: “This does not mean that Google will ultimately pay 1.6 billion … There will be appeals, and perhaps a negotiation in the end, in particular on penalties.”
On Wednesday, Britain’s Public Accounts Committee slammed Google’s £130 million British settlement, calling it “disproportionately small.” In January Google agreed to pay the amount for a decade’s-worth of back taxes in Britain — prompting criticism from politicians and campaigners who claim this amounts to a 3% tax rate.
The Public Accounts Committee’s report criticises the lack of “transparency” over the settlement. “In the absence of full transparency over the details of this settlement and how it was reached we cannot judge whether it is fair to taxpayers,” it says. “The sum paid by Google seems disproportionately small when compared with the size of Google’s business in the UK, reinforcing our concerns that the rules governing where corporation tax is paid by multinational companies do not produce a fair outcome.”
Google’s European boss Matt Brittin was grilled by the Public Accounts Committee earlier in February. He was criticised early on when he failed to name his salary, and called repeatedly for a simplification of global tax rules.
The Committee’s report takes issue with this call: “Google’s stated desire for greater tax simplicity and transparency is at odds with the complex operational structure it has created which appears to be directed at minimising its tax liabilities. Google admits that this structure will not change as a result of this settlement.”
A Google spokesperson declined to comment on the figure.
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