Google Back Taxes Dismissed By French Court

A Paris court has dismissed a €1.11 billion ($1.27 billion) tax bill levied against Google. That amount represents five years of back taxes for a period ending in 2010. The ruling was a major victory for Google.

The dispute had been raging for almost six years. France took Google to court demanding the back taxes back in February. The nation’s administration requested that Google’s European headquarters in Ireland be taxed as if it also has a permanent base in France.

The tribunal ruled that Google’s ad-sales business did not have a taxable base in France. The court also rejected claims the search-engine giant abused loopholes to avoid paying its fair share. Google said in a statement that the ruling “has confirmed Google abides by French tax law and international standards.”

Paris judges ruled that Google France didn’t have the sufficient autonomy from the Irish headquarters. For example, Google France’s employees couldn’t accept online advertising requests from local clients because all orders needed approval from the headquarters in Ireland. That lack of presence absolves the company of responsibility for the back taxes.

The European Union levied a 2.42 billion euro ($2.72 billion) fine against Google last month for favoring its own shopping services in its search results. That was the biggest antitrust penalty the EU has ever applied to a single company. The company has hired a team of lawyer from four top European law firms to fight the fine.

Back in January, the United Kingdom won a $185 million settlement from Google for back taxes dating back to 2005. The company also recently struck a 306 million-euro settlement with Italian tax authorities to end a dispute spanning 14 years.

Several of the biggest tech firms are facing similarly big fines in Europe. The EU has also taken aim at Google for its Android operating system and its dominance in search. In a parallel criminal case, French prosecutors raided the Alphabet Inc. unit’s Paris office in May 2016.

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