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France to appeal after Google escapes €1.1bn tax bill

The French government will appeal a court ruling that US internet giant Google is not liable for 1.12 billion euros ($1.27 billion) in taxes claimed by the state, Budget Minister Gerald Darmanin said Thursday.

France to appeal after Google escapes €1.1bn tax bill
Photo: AFP
“We will appeal this ruling to safeguard the interests of the state,” Darmanin told parliament.
 
The court ruled Wednesday that France could not claim tax on revenues generated by Google in France that were transferred to its Irish subsidiary GIL.
   
Taxes are far lower in Ireland, a legal loophole prized by many multinationals in Europe.

 
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Photo: AFP

The French claim was the latest in a series against the California-based group, with Britain and Italy agreeing settlements over the Irish tax arrangement.
   
European action has become increasingly aggressive against US technology giants Amazon, Facebook and Apple as well as Google.
  
The EU hit Google with a record 2.4 billion euro fine on June 27 for abusing its dominant position in the search engine business and illegally favouring its own shopping service over rivals.
   
Newly elected French President Emmanuel Macron promised to get tough on US internet giants during his campaign, seeing their low tax rates as a source of resentment about globalisation and unfair on European companies.
   
The French claim is a fraction of the company's annual profits. In April, Alphabet, Google's parent company, declared a 29 percent jump in profit to $5.4 billion in the first quarter of 2017.

BUSINESS

Google News to return to Spain after seven-year spat

Google announced Wednesday the reopening of its news service in Spain next year after the country amended a law that imposed fees on aggregators such as the US tech giant for using publishers’ content.

Google News to return to Spain after seven-year spat
Google argues its news site drives readers to Spanish newspaper and magazine websites and thus helps them generate advertising revenue.Photo: Kenzo TRIBOUILLARD / AFP

The service closed in Spain in December 2014 after legislation passed requiring web platforms such as Google and Facebook to pay publishers to reproduce content from other websites, including links to their articles that describe a story’s content.

But on Tuesday the Spanish government approved a European Union copyright law that allows third-party online news platforms to negotiate directly with content providers regarding fees.

This means Google no longer has to pay a fee to Spain’s entire media industry and can instead negotiate fees with individual publishers.

Writing in a company blog post on Wednesday, Google Spain country manager Fuencisla Clemares welcomed the government move and announced that as a result “Google News will soon be available once again in Spain”.

“The new copyright law allows Spanish media outlets — big and small — to make their own decisions about how their content can be discovered and how they want to make money with that content,” she added.

“Over the coming months, we will be working with publishers to reach agreements which cover their rights under the new law.”

News outlets struggling with dwindling print subscriptions have long seethed at the failure of Google particularly to pay them a cut of the millions it makes from ads displayed alongside news stories.

Google argues its news site drives readers to newspaper and magazine websites and thus helps them generate advertising revenue and find new subscribers.

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