Google May Avoid Paying $1.8 Bln in Back Taxes to France

© AFP 2023 / LLUIS GENEA visitor takes a picture with his mobile phone at the stand of Google on the second day of the Mobile World Congress on February 28, 2017 in Barcelona
A visitor takes a picture with his mobile phone at the stand of Google on the second day of the Mobile World Congress on February 28, 2017 in Barcelona - Sputnik International
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Google may not have to pay 1.6 billion euros in unpaid taxes to France.

Google headquarters in Mountain View, Calif. 2013 - Sputnik International
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MOSCOW (Sputnik) — US-based tech giant Google may not have to pay 1.6 billion euros ($1.8 billion) in unpaid taxes to France due to company's lack of so-called permanent establishment in the country, local media reported Wednesday, citing a state representative in Paris administrative court.

"Google France does not have permanent establishment in France, it applies both to income and value-added taxes," the representative was quoted as saying by Le Monde newspaper.

The French fiscal authorities, as a result, have no right to recover the shortfall in taxes from the company, the court's spokesperson said.

In February 2016, media reported that French authorities suspected Google of tax evasion in the amount of about 1.6 billion euros. In May, the headquarters of the Internet giant in Paris were searched. Following the investigation, the French Finance Ministry demanded 1.6 billion euros in unpaid taxes from the company. The court will rule on the Google case by mid-July.

In May, reports emerged, claiming that Google had agreed to pay over $330 million to settle its year-long tax dispute in Italy. Google also closed a $185-million deal with the United Kingdom last year.

A permanent establishment (PE) is a fixed place of business, which generally gives rise to income or value-added tax liability in a particular jurisdiction. The term is defined in many income tax treaties and in most European Union Value Added Tax systems.

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