Alphabet has been running afoul of tax regulators and lawmakers in the European Union lately, mainly over policies that optimize their tax portfolio to pay out the least possible by law, or by avoiding tax altogether. Mostly, this is done by routing business to their Ireland arm, where corporate taxes are a great deal less expensive. These practices are fairly common among large companies, particularly in the tech sector. Alphabet had recently paid out around £130 million in a back tax settlement with Great Britain, though analysts and authorities seemed to come to the general consensus that the amount paid wasn't fair and should have been higher. France has now come out and made their grievances known. To fulfill back tax obligations in France, authorities want Google to pony up 1.6 billion Euros.
According to France's Finance Minister, Michel Sapin, the amounts involved here are far too much to allow for a simple settlement to be made in the way Google struck a deal with British tax authorities. Back in 2012, there were rumors of a 1 billion Euro demand from France, which Google denied. According to local tax authorities, a tentative assessment is issued before the real thing is done and the taxes become due, which can be contested in court, should a taxpayer see fit. A Google spokesperson who was contacted on the matter said that Google is obeying applicable tax laws in all the countries in which they operate.
According to European Union tax laws, an international company's tax liability within a country can be reduced or even eliminated entirely, should the company lack what is termed as a "permanent establishment" in the country. For this reason, many of the tax-based allegations being thrown Google's way in Europe have been largely ignored. France's plea to see some back tax from Google is nothing new or much different from existing and previous cases, but France is asking for what may be the largest amount left due in the Google and Europe tax scuffle to date. Beyond confirming the amount owed and that there would be no settlement, both Google and France declined to comment on the situation.