Google has been having a lot of problems in Europe as of late, and while authorities in Germany, Spain, Russia and the U.K. have all expressed reservations about the way the company conducts its business in those countries, the French seem to be the most unimpressed by the American tech giant. What’s alarming for Google is that not only are European competition regulators hot on its heels for allegedly abusing its position of dominance in online search and with Android, tax authorities across the continent are also distinctly unhappy with the contribution the company seems to be making to their respective national exchequers.
Many, like the British tax authority, HMRC (Her Majesty's Revenue and Customs), have already conducted a lengthy, multi-year investigation into Google’s alleged tax-avoidance practices, leading to a £130 million ($190 million) deal being signed between the two back in January, as part of an out-of-court settlement. Unfortunately for Google, it’s now the turn for the tax authorities in France to point their guns at the company, after conducting tax raids against the tech giant and other U.S. firms, like the fast-food chain, McDonalds. With the French police having raided Google's Paris headquarters last Tuesday on suspicions of aggravated tax fraud, the country’s Finance Minister, Mr. Michel Sapin, has now made it clear that unlike its British counterpart, French tax authorities are prepared to “go all the way” in their pursuit of Google in order to recover over €1.6 billion ($1.78 billion) in back taxes from the company.
In fact, Mr. Sapin was fairly categorical about his assertion that the French government has a good case against Google, which is why “There won't be negotiations”. Referring to the deal struck between the HMRC and Google in the UK, the minister said, “We don't do deals like Britain, we apply the law”. While McDonalds also seem to be facing the wrath of Mr. Sapin and his team, Google is actually bearing the brunt of the French tax demands, having used an EU tax loophole for years to save on corporate taxes, by reporting all its sales in Ireland, which happens to have an exceptionally low corporate tax rate. A Google spokesperson, meanwhile, refused to say anything specific about Tuesday’s raids, but claimed that the company is in full compliance with French tax laws.