Friday, 13 September 2019 06:09

Google to pay France $1.55b to settle financial fraud probe Featured

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Google to pay France $1.55b to settle financial fraud probe Pixabay

Search giant Google has reached a settlement with France and will pay about €965 million (US$1.07 billion, A$1.55 billion) to settle a fiscal fraud probe that has been going on for the last four years.

The investigation has been looking into whether Google had not declared certain business activities it was conducting in France. The amount is made up of a €500 million fine and additional taxes of €465 million.

Reuters reported that the settlement could serve as a precedent for other big technology companies who have also faced tax inquiries in France.

Google does not pay a great deal of tax in most countries where it operates, instead using a loophole in international tax law to attribute all income to Ireland. This means all sales contracts have to be completed by staff based in Dublin.

Paris has taken the lead in trying to bring big tech to heel, passing a digital tax law in July despite threats from the US. The law imposes a 3% digital services tax on companies like Google and Facebook.

It will cover companies that have global revenue of more than €750 million and French revenue of more than €25 million.

The fine imposed on Thursday is less than the €1.6 billion that the French Ministry of Finance had sought from Google after a raid on the company's offices in May 2016.

Google was also raided by Spanish officials as part of an ongoing tax probe, with the raid in Madrid taking place in July 2016.

In January, Google was fined €50 million by the French National Data Protection Commission (CNIL) for violations of the GDPR following complaints by the organisations None Of Your Business and La Quadrature du Net, the latter representing 10,000 people.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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