Google agrees to €1bn “historic” settlement with French tax authorities

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France: Google on Thursday said that it has agreed to pay almost €1bn to settle all of its litigation with the French tax authorities in a “historic” agreement.

Google agreed to pay close to €1bn to French authorities to settle a fiscal fraud probe that began four years ago in a deal that may create a legal precedent for other large tech companies present in the country.

French investigators have been seeking to establish whether Google, whose European headquarters are based in Dublin, failed to pay its dues to the state by avoiding to declare parts of its activities in the country.

The deal includes a €500m fine to bring to an end an investigation by the National Finance Ministry and a $465m tax adjustment.

Google, part of Alphabet, pays little tax in most European countries because it reports almost all sales in Ireland.

This is possible thanks to a loophole in international tax law but it hinges on staff in Dublin concluding all sales contracts.

The agreement allows Google “to settle once for all these past disputes,” said Antonin Levy, one of the firm’s lawyers.

The settlement marks the end of a four-year investigation that looked at whether Google routed profits from its French activities to Ireland, which is a lower-tax jurisdiction.

“We remain convinced that a coordinated reform of the international tax system is the best way to provide a clear framework for companies operating worldwide,” Google said.

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