Google won its fight against a 1.12 billion-euro French tax bill after a court rejected claims the search-engine giant abused loopholes to avoid paying its fair share.
The Paris administrative court decided that Google didn’t illegally avoid French taxes by directing sales in the country out of Ireland. Judges ruled that Google’s European headquarters in Ireland can’t be taxed as it didn’t have a permanent base in France via its French company, Google France. Though France’s tax authorities argued that Google should have paid that amount in tax, the court said, “Google Ireland Ltd. isn’t taxable in France over the period 2005-2010.”
In a parallel criminal case, French prosecutors raided the Alphabet Inc. unit’s Paris office in May 2016 following months of preparation spent offline to prevent leaks. That ongoing probe seeks to verify whether Google’s Irish unit has a permanent establishment in France and whether the firm failed to declare part of its income in the country.
“The French Administrative Court of Paris has confirmed Google abides by French tax law and international standards”, Google said in a statement. The win for Google comes as France’s newly elected President Emmanuel Macron vowed to make the country “a startup nation” and pledged in June to create a 10 billion-euro fund to help finance innovation. Weeks later, French billionaire entrepreneur, Xavier Niel, unveiled a gleaming startup incubator in Paris to host his ambition to put the city on par with Silicon Valley for technology investment and to produce the next Facebook.