FRENCH AUTHORITIES have insisted that Google pay €1.6bn (£1.3bn) in back taxes, on the same day that the PAC slammed HMRC’s handling of the search engine giant’s UK tax affairs.
An unnamed French government official told Reuters: “As far as our country is concerned, back taxes concerning this company amount to €1.6bn”.
However reports from Agence France-Presse suggest that Google might be able to negotiate its way around the sum and pay a much lower figure.
A spokesperson for Google France failed to comment on the demand from the French government, but told the media that the company has obeyed tax rules in the countries where it operates.
Google’s international tax arrangements have come under close scrutiny in recent days. The Public Accounts Committee has published its conclusion following its investigation into the search engine and HMRC, criticising the agreement’s lack of transparency, as well as the failings of international tax rules.
“Multinational companies seem to be able to control how much corporation tax they pay in each country by the way they structure their business and allocate profits between their overseas entities.
“The fact that companies can do this within the rules shows that the corporation tax system is in urgent need of reform,” continued the committee, which added that it was concerned that international tax authorities have been more challenging in their assessment of Google’s tax position.
The ATT had previously expressed concern that the legislation was overly complex and created unnecessary complications within the practical working of the new allowances
Introduced in 2013 to encourage R&D investment, the scheme allows UK businesses to pay only 10% corporation tax on profits derived from any UK or certain EU patents
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