PARIS (Reuters) – Google agreed to pay almost 1 billion euros ($ 1.10 billion) to French authorities to complete a fiscal fraud investigation that began four years ago in an agreement that could set a legal precedent for other large technology companies present in the country.
French investigators have sought to determine whether Google, whose headquarters are based in Dublin, failed to pay contributions to the country by avoiding declaring part of its activities in the country.
The settlement consists of a 500 million euro fine and an additional tax of 465 million euros, Google said in a statement.
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Google, part of Alphabet Inc., pays a small amount of tax in most European countries because it reports almost all sales in Ireland. This is possible thanks to a gap in international tax law but it depends on staff in Dublin completing all sales contracts.
“(This agreement allows) to settle once for all these past disputes,” Antonin Levy, one of Google’s lawyers, told a hearing in a Paris court.
A combined tax payment of fewer than 1.6 billion euros was sought by the finance ministry from Google after Paris corporate offices were raided in 2016. At that time, the ministry had ruled out a settlement with the company.
Budget Minister Gerald Darmanin told the Le Figaro newspaper on Thursday that the settlement would create a legal precedent and added that talks were ongoing with several other companies, large and small. He did not mention their names.
European countries have struggled to tax taxes on the profits of multinational technology companies from their jurisdiction.
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