Now the French say the UK went too easy on Google

French tax authorities have criticised Google’s £130 million UK settlement, saying they are seeking a substantially larger amount. 

The country’s finance minister Michel Sapin has become the latest political figure to attack Google’s tax agreement with HMRC. 

Speaking at a conference in Paris, Sapin said the UK deal is overly generous towards Google and seems “more the product of a negotiation than the application of the law”. 

He called it “lump sum taxation”, and stated that “we don’t want to do this in France”. He warned that Google was facing a “much bigger” tax bill in France, whose government is seeking an estimated €1 billion (£748.5 million) from the company in back taxes according to French magazine Le Canard Enchaîné.

“The French tax administration does not negotiate the amount of taxes owed,” a spokesperson for the French finance ministry told AFP (French) in relation to the deal. “It applies the rules.”

Sapin’s comments follow a raft of objections from UK officials, including high-ranking members of both Labour and the Scottish National Party (SNP). 

The £130 million sum was decided during closed-door negotiations, following a six-year audit of the company’s UK tax liability.

The investigation – which covers the financial years from 2005 to 2015 – centred on whether or not Google’s transactions with British businesses should be taxable in the UK.

Currently, the company falls under the Republic of Ireland’s tax jurisdiction, as it claims that most of its EU operations are routed through its Dublin headquarters.

The taxman, on the other hand, felt that Google’s UK profits (which totalled £4.6 billion in the UK for 2015) were subject to British tax laws.

However, many EU politicians claim that this constitutes an unfairly favourable deal from the UK government and are demanding much larger sums.

Google could be facing a large tax bill from Italy as well as France, according to Reuters. The government there says the company has evaded €227 million in taxes, split between revenues and royalties.

This marks the latest in a long line of clashes between the search tycoon and European regulators. 

In addition to the current scandal and probes into whether its Irish tax dealings constitute illegal state aid, Google is also in the midst of an EU antitrust investigation into potential abuse of its search monopoly.

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