There is a possibility that Alphabet Inc (NASDAQ:GOOG)’s Google would be paying more than a billion dollar in back taxes to the French government, significantly more than its £130 million ($188 million) tax settlement agreement with the authorities in the United Kingdom.
A source from the Finance Ministry of France told Reuters that the government wants Google to pay €1.6 billion ($1.76 billion) in back taxes. Google is now operating as subsidiary of Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL).
The Finance Ministry official who spoke on the issue but requested anonymity said, “As far as our country is concerned, back taxes concerning this company amount to €1.6 billion euros.”
The search engine giant is under scrutiny in France and other countries in Europe due to its aggressive use of tax optimization strategies.
Google back taxes in France “far greater” than UK
According to Reuters, the spokesperson of Google France refused to comment on the amount of back taxes the French government is seeking from the company. However, the spokesperson said the company complied with the tax rules of every country where it operates its business.
The French Finance Ministry also declined to comment on the matter. In 2012, Google denied an unconfirmed media report indicating that the French government was demanding €1 billion tax bill.
Earlier this month, French Finance Minister Michel Sapin rejected the idea of reaching a tax settlement agreement with Google citing the reason that the amount at stake in France was “far greater” than those in the United Kingdom.
British lawmakers strongly criticized the £130 million tax settlement agreement as “disproportionately small.” The settlement covered Google’s back taxes in UK for ten years since 2005.
During the Common Public Accounts Committee (CPAC) hearing in London earlier this month, Google global tax chief Tom Hutchinson told MPs that the £130 million tax settlement included £18 million in interests. He also emphasized that UK tax authorities did not “throw out a number – it’s not a negotiation. There was no top-line figure; that’s not how the process works.”
Google managers under investigation in Italy over tax evasion allegations
Earlier this month, it was reported that prosecutors in Italy are investigating five managers at Google over allegations that the search engine giant avoided paying €227 million ($257 million) in taxes.
Italian tax authorities accused Google of tax evasion based on their belief that the search engine giant failed to declare approximately €100 million revenues from 2009 to 2013.
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