The search engine known as Google is about to be sent to Madam Guillotine for failing to pay enough tax in France.
Despite its insistence that it always pays its tax according to law, Google is believed to have underpaid Monsieur Taxman more than a $1 billion over the last few years. Word on the street is that the French government has notified the toothless old crones to start knitting while a good scaffold is set up in the Place de la Concorde.
Google has been put on notice of its delinquency by the French tax authorities, and the company has acknowledged that it might be issued a large penalty for non-compliance by the French Direction Générale Des Finances Publiques.
According to a Google earnings report filed for the quarterly period ending March 31, 2014, the company confirmed that France has started pressuring the company as a result of what the French government sees as Google’s evasive tax practices for several years.
“In March 2014, we received a tax assessment from the French tax authorities,” the company wrote in its earning report. “We believe an adequate provision has been made and it is more likely than not that our tax position will be sustained. However, it is reasonably possible that resolution with the French tax authorities could result in an adjustment to our tax position.”
Google reports huge earnings in Ireland (€12.4 billion) and a tiny figure in France (€138 million) and even if it does a roaring trade. Ireland has a much lower corporate tax rate of 12.5 percent and Inspector Taxman apparently smells le rat.
While Google has maintained that the company has operated in compliance with French law, the French think Google is passing off French contracts as if they were Irish ones in order to be subject to a lower tax rate.