Google faces yet another tax headache, this time in France. After an escalating investigation which has been drawn out over the last number of months, the corporation has been hit with a whopping €1 billion tax bill from French tax authorities.
Investigations in to Google’s tax affairs have been ongoing since 2011, when financial inspectors first inspected the accounts in the corporation’s Parisian offices. The investigations uncovered evidence that Google had substantially reduced its tax liability through a complicated series of layers whereby it first sent revenue through its Dutch registered operations, then sent it through its Bermuda-based holding company before finally reporting it for tax purposes in Ireland which has a lower tax rate.
France is currently one of the highest taxed nations in the world, with a top rate of tax set at 75%, compared to Ireland’s relatively low 41%.
Court documents obtained by the French national news agency state that Google France earned €192.9 million in 2012 - €8.3 million of which was raw profit - but paid a meagre €6.5 million in tax on this profit. Analysts have calculated that Google France may have earned up to a massive €1.4 billion.
Earlier this month, French authorities fined Google €150,000 for ignoring a three-month deadline to align its methods of tracking and storing user information with national laws.