Google has been getting a lot of this lately. The British government also demanded a billion or so but thanks to David Cameron’s superior negotiating ability he managed to beat the company down until it only had to pay $181.18 million and a packet of pork scratchings.
However the French don’t appear to be surrendering this time. “As far as our country is concerned, back taxes concerning this company amount to 1.6 billion euro,” a French government official said.
French tax authority usually issues at least one preliminary assessment before its final assessment, which can be challenged in court if not accepted, tax advisers say.
Earlier this month, Finance Minister Michel Sapin ruled out striking a deal with the U.S. search engine company as the British government recently did, saying the sums at stake in France were “far greater” than those in Britain.
France, Britain and other countries have complained at the way Google, Yahoo! and other digital giants generate huge profits in their countries but have their tax base in countries such as Ireland, where corporate tax rates are far lower.
But the complaints have made little legal headway because EU tax law protects companies against paying tax in a country where they do not have what is termed a “permanent establishment”.