French government demands €1.6 billion from Google over unpaid taxes
Feb 25, 2016 08:14 AM EST
The French government is now demanding €1.6 billion pounds from Google. This came after years of Google's alleged failure to pay the correct tax.
Google's chief executive Sundar Pichai is visiting the economy minister of France, Emmanuel Macron, in Paris on Wednesday. Reports say that Google could still negotiate and might not pay the actual amount. French Finance Minister has ruled out and striked a deal with the search engine company. Google, however, has not given its side of the story due to the confidentiality of the matter, as per BBC.
It was just recently that taxes of international companies have come under deep scrutiny in UK. Several of these companies have been accused of using legal methods to minimize their taxes. With regards to Google's case, the company's tax structure allowed it to pay its taxes in Ireland even though it gets its profit from the UK.
According to Forbes, the French treasury department has been seeking 1 billion euros from Google for tax evasion for almost 2 years. The department said the company is drawing its money to other European countries and hiding it in offshore tax havens.
Google and the UK government made an agreement that the company will pay 130 million pounds for the year 2005 but the Public Accounts Committee disagreed and said the agreed settlement seems disproportionately small compared to the size of its business in the UK.
Ordinary taxpayers in UK face an automatic 100 pound fine if they are delayed in filing their taxes. And these fines can quickly go up if the delay is more than three months and can amount up to 100 percent of the total sum. But the HMRC admitted that they had never fined Google a single penny even though the agreement was made last month, Daily Mail reported.
Other companies like Starbucks and Fiat Chrysler was also asked to pay 30 million euros in taxes, although disputes are still on going. Amazon and Apple are also being investigated regarding these tax deal issues.