Google could end up facing a $1.3 Billion tax fine in France. According to a new report French regulatory authorities may slap Google with the fine if it decides that Google avoided paying taxes in the region that it should have paid, and the decision on whether or not Google has to pay such a fine could come this week, potentially as early as tomorrow, July 12th, though there is no guarantee that a decision won’t take longer.
Google may have dodged paying taxes in France by moving the sales that came from within the country through Ireland using techniques referred to as “Double Irish” and “Dutch Sandwich.” The method involves two Irish and one Dutch subsidiary company that are all used to route sales and profits before sending them to an offshore company for holding, which can result in dramatically lowered or completely avoided tax payments. As of right now Paris judges are reportedly deciding on whether or not Google’s headquarters in Ireland should be required to pay taxes the way that it would if it had a headquarters based in France. Although it’s still unclear whether or not Google will end up having to pay the tax fine, Google maintains that it follows French laws regarding this matter and states that it’s doing what it can to be cooperative.
According to Paris tax lawyer Maximilien Jazani, the way Google’s tax case plays out could have lasting affects on the French economy, and could dissuade investment in the country. Jazani also states that if Google wins its court case over French taxes, it could also weaken a separate case that it’s involved in within the country which centers around the tax status its Irish headquarters in France, though this separate case is a criminal case. The decision for the tax case where Google faces the $1.3 Billion fine comes at a time where Google is also wrapped up in an antitrust case with EU regulatory authorities revolving around its shopping services, in which it’s currently challenging the EU’s decision to impose a $2.7 billion fine, which it could end up having to pay if things don’t end up in Google’s favor.