Google France Faces Fine Of $1.3 Billion For Tax Noncompliance. Google Denies The Accusation. | TechCrunch
Google France could be ordered to pay $1.3 billion to France’s equivalent of the IRS (Direction générale des finances) due to tax noncompliance in 2011. The agency has been investigating Google’s revenue in France for months. With only 138 million euros of revenue in France in 2011, the company has used tax-optimization strategies, but has always stated that they comply with the law. It denies the accusation.
Most of Google France’s revenue could go directly to Google’s European headquarters in Ireland where the corporate tax is only 12.5 percent.
French news website Owni obtained Google Ireland’s 125-page financial statements for 2011, certified by Ernst & Young, in order to corroborate Le Canard enchaîné’s investigation.
Here are the important numbers:
-Revenue in France in 2011: €138 million
-Revenue in Ireland in 2011: €12.4 billion
-Profit in Ireland in 2011: €9 billion
-Tax in France in 2011: €5.5 million
-Estimated tax in France for 2011 according to the DGF: €150 million
Once again, the problem isn’t that most of the revenue is going to Ireland. It is that French contracts are recorded and taxed by Irish authorities.
So is the game up? Is our distinct "advantage" about to get eroded via cases like this?But France isn’t the only European country in which Google only reports a fraction of their revenue. Supposedly, Google operates in many European countries and proceeds exactly the same way. It’s the only way to justify the incredible revenue in Ireland.