Google has faced a series of legal challenges across Europe, with many of them focused on the company’s tax and competitive practices and at this issue whether Google had avoided taxes in France by routing sales in the country through an Irish-based subsidiary over a 5 year period ending in 2010, Google won its latest legal battle in Europe. The French court said the Google’s Irish unit was not taxable in France and did not need to pay $1.3 billion in back taxes.
According to court filings, Google employs 700 people in France but used Ireland based division based to sell French customers digital services like its well-known advertising platform AdWords.
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French tax authorities argued that even if the contracts were made with the Irish subsidiary, Google’s French employees were instrumental in selling the ad space.
While Court found that:
- the French tax authorities could not collect corporate income and withholding taxes from the Irish unit
- It did not have a stable presence in France.
- Other taxes, including a value-added tax, did not apply to the company.
Google said that the rulings confirmed that:
- They remain committed to France and the growth of French digital economy.
- It abides by French tax law and international standards.
As per the office of the French budget minister, Gérald Darmanin, the country’s tax authorities planned to appeal the court’s decision.
Google’s previously faced challenges:
Last month, for favoring its products over those of its competitors on its powerful search engine, European regulators levied a record $2.7 billion fine against Google.
European Union officials also brought charges against Google’s mobile operating system, Android, alleging the company had forced cellphone manufacturers to install Google services on the phones, like mobile search.
Other technology companies also faced heightened scrutiny in Europe:
Last August, the European Union ordered Apple to pay $14.5 billion in taxes in Ireland which Apple is appealing it.
It contended that Google deals with the Irish government had allowed the Apple to pay virtually nothing on its European business in last few years.