Google Faces $1.3 Billion French Ruling Amid Rising Tax Populism

July 11, 2017

Google will find out this week if it owes 1.12 billion euros ($1.3 billion) in back taxes to France, just days after it was slapped with a record antitrust fine by the European Union.

Paris judges are set to rule as soon as Wednesday whether Alphabet Inc.’s Google illegally dodged French taxes by routing sales in the country out of Ireland. The case hinges on whether Google’s European headquarters in Ireland should be taxed as if it also has a permanent base in France.

“The backlash has been unrelenting because tax populism and Google-bashing are on the rise among certain politicians,” said Maximilien Jazani, a tax lawyer in Paris. The case could have “extremely harmful” side effects because any change in how tax law is interpreted would apply to all companies and could deter investment in France, he said.

Authorities across the continent have been trying to claim a slice of the billions of dollars of profits Google’s owners kept out of their grasp using techniques known as the Double Irish and the Dutch Sandwich. To end a dispute spanning 14 years, it recently struck a 306 million-euro settlement with Italian tax authorities. Last year, Mountain View, California-based Alphabet also agreed to pay 130 million pounds in an accord with U.K. authorities for taxes going back to 2005 after facing sharp criticism for booking ad sales through Ireland to reduce liability.

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This article was posted: Tuesday, July 11, 2017 at 8:01 am

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