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France gives Google a $1.76 billion arrears tax notice

Unlike Britain, France is not willing to compromise, yet on its tax demand for arrears.

As per a source from the France’s Ministry of Finance, the French government is demanding that U.S. internet search engine giant Google pay 1.6 billion euros in back taxes. Google has been criticized for using aggressive tax optimization techniques to manage it country specific tax profiles.

"As far as our country is concerned, back taxes concerning this company amount to 1.6 billion euros," said an official on the condition of anonymity.

On the other hand, a spokeswoman for Google France has said that the company obeys tax rules in every country that it operates in.

Earlier, in 2012, media reports had claimed that French Authorities had then claimed 1 billion euros in taxes, which Google denied at that point of time.

Tax advisors state that French tax authorities typically issue at least one preliminary assessment, which can be challenged in court in case it is disputed before sending its final orders.

Earlier this month, Michel Sapin, France’s Finance Minister, ruled out making a deal the way the British Government did, as the sums at stake are "far greater" than those with Britain.

In the British deal, Google got away with paying 130 million pound ($181.18 million) for the period of 2005-2014, drawing extensive criticism from British lawmakers who said the amount paid by Google was "disproportionately small".

Many countries, including France and Britain, have since long complained that tech companies generate significant profits in their countries but relocate their earnings to countries such as Ireland, where tax rates are much lower than their own.

Their complaints have not made any material difference in legal terms, as EU law protects companies against taxes in a country where they do not have a "permanent establishment".

($1 = 0.9108 euros)

($1 = 0.7175 pounds)

Debashish Mukherjee

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