Europe's news in English

COPY LINK

GOOGLE

France ‘set to bill Google for €1 billion’ in taxes

French authorities have decided to make a tax claim of €1 billion against Google following a probe into the tax strategies by the US Internet giant, Le Point magazine reported on Tuesday.

Published: 4 February 2014 20:34 CET

France 'set to bill Google for €1 billion' in taxes

France to lodge €1 billion tax claim against Google. Photo: AFP

A Google spokesman in France declined to comment on the report, saying the company does not comment on rumours.

The French finance ministry also declined to comment, citing tax confidentiality.

France is one of a growing number of cash-strapped nations to pursue more aggressively what they see as abuse of tax and accounting rules that allows some multinational companies to pay less tax.

French tax inspectors searched Google's Paris offices in June 2011 as it opened a probe into how the company implements transfer pricing between its different units, a strategy many multinationals use to shift revenue and tax liability between countries.

Google has reduced the amount of tax it pays in France by funnelling most of its revenue through a Dutch-registered intermediary and then to a Bermuda-registered holding, Google Ireland Limited, before reporting it in low-tax Ireland.

According to court documents obtained by AFP, Google France reported €192.9 million of revenue in 2012, and paid €6.5 million in tax on the €8.3 million of net profit it earned.

Industry analysts estimate that Google generated between €1.25 and €1.4 billion in revenue in France in 2011, mainly from Internet advertising.

Last year the Group of 20 advanced and developing nations endorsed an action plan to clamp down on tax avoidance which its creators say could lead to the biggest change in the global tax system since the 1920s.

Member comments

Log in here to leave a comment.

Become a Member to leave a comment.

Beskæftigelsesfradraget: What is Denmark's employment allowance?

What is the employment allowance?

The Beskæftigelsesfradraget (from beskæftigelse, meaning employment, and fradrag, meaning rebate) was brought in by the centre-right Liberal Party back in 2004, the idea being that it would incentivise people to get off welfare and into a job.

Everyone whose employer pays Denmark’s 8 percent AM-bidrag, or arbejdsmarkedsbidrag, automatically receives beskæftigelsesfradraget. Unlike with some of Denmark’s tax rebates, there is no need to apply. The Danish Tax Agency simply exempts the first portion of your earnings from income taxes.

In 2022, beskæftigelsesfradraget was set at 10.65 percent of income with a maximum rebate of 44,800 kroner.

How did the government agree to change the employment allowance in its coalition deal?

In Responsibility for Denmark, the coalition agreement between the Social Democrats, the Liberals and the Moderate Party, the new government said it would set aside 5 billion kroner for tax reforms.

Of this, 4 billion kroner was earmarked for increasing the employment allowance, with a further 0.3 billion going towards increasing an additional employment allowance for single parents.

According to the public broadcaster DR, the expectation was that this would increase the standard employment allowance to 12.75 percent up to a maximum rebate of 53,600 kroner.

How might this be further increased, according to Børsen?

According to a report in the Børsen newspaper, the government now plans to set aside a further 1.75 billion kroner for tax reforms, of which nearly half — about 800 million kroner — will go towards a further increase to the employment allowance.

The Danish Chamber of Commerce earlier this month released an analysis in which it argued that by raising removing all limits on the rebate for single parents and raising the maximum rebate for everone else by 20,300 kroner, the government could increase the labour supply by 4,850 people, more than double the 1,500 envisaged in the government agreement.

According to the Børsen, the government estimates that its new extended allowance will increase the labour supply by 5,150 people.

Url copied to clipboard!