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Google facing $1.3bn fine in France for Tax Noncompliance .. Ireland in middle of it


robut

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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.
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.
So is the game up? Is our distinct "advantage" about to get eroded via cases like this?
 
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odlum

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Another story from Europe on Ireland's corporation tax. These things come up monthly and have done for 20 years.
 

Ribeye

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I will take absolutly no pleasure in witnessing what is going to happen to France,

It's a country that I have a great affection for,
 

forest

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I love all these stories you hear mainly from France, Germany, UK about big companies avoiding tax
The always blame Ireland
You never hear mention of it here
 

stopdoingstuff

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Of course it would never occur to the French that they can lower their taxes too and get 12.5% of a big figure rather than a bazillion % of nothing.
 

Analyzer

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Just wondering....any chance that the French tax authorities might take an interest in the Bonox and the Malteser ???
 

Sync

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I love all these stories you hear mainly from France, Germany, UK about big companies avoiding tax
The always blame Ireland
You never hear mention of it here
I think you'll find they're blaming google.
 

Con Gallagher

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Since when are companies taxed on revenue, as opposed to profits?
(Though an EU USC type tax on revenue in corporations would benefit the internal market and if third world countries followed suit, the €23tr untaxed money sloshing around the world might benefit citizens rather than shareholders).
 

Clanrickard

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Franker65

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Well, it certainly won't be a problem for Google, that's just pocket change. And Google is in the position where everyone depends on it. If they are abiding by the law, their strategy makes perfect sense.
 

DCon

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Misleading thread title. Google is accused of selling advertising online in France and not declaring the contracts.
Aren't they claiming that the contracts are sold from Ireland and the income should be recognised in Ireland as a result?
 

robut

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Misleading thread title. Google is accused of selling advertising online in France and not declaring the contracts.
Thread Title is purely based on the article title. I was not going to make up a thread title away from the article content nor try and guess others opinion as to what a thread title should be. Have a chat with TechCrunch :D

And saying its misleading is your opinion? Feel free to request a mod to change the title to what you are happy with, as the OP I give you full permission to do so and do not mind ..
 
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Kevin Ryan

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Apr 20, 2012
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Another story from Europe on Ireland's corporation tax. These things come up monthly and have done for 20 years.
Now that's complacency.

Of course it would never occur to the French that they can lower their taxes too and get 12.5% of a big figure rather than a bazillion % of nothing.
Do you think Ireland gets 12.5% of the big figure?

With multinationals based here, Ireland often gets nothing more than 0-2% of the underlying corporate profit. Why? Because it's all part of the deal that in return for being based here, providing employment and paying big bucks to local accountants and solicitors, the companies are allowed to engage in very aggressive transfer pricing to reduce towards nothingness the actual liability to corporation tax.
Here's some of how Google does it: Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes - Bloomberg

To stop most of this, large EU states do not need to persuade Ireland to change its corporation tax rate, or to clamp down on transfer pricing and other fiddles. They just need to impose CCTB rules so that revenue from, say, internet advertising sold to a French company is booked by Google as revenue in France.

How can Ireland stop that? And what does it mean for the large presence of service-sector multinationals in Ireland if they feel they can locate closer to markets (and local employees) without any great change to corporate tax?
 
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