Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) is facing a huge tax demand from the government of France, which could change its tax position, according its latest regulatory filing with the Securities and Exchange Commission (SEC) on Thursday.
The search engine giant did not specify the amount demanded by the French tax authorities, but market observers are suggesting it could be hundreds of millions of euros based on reports earlier this year.
In its filing, Google Inc (NASDAQ:GOOG) (GOOGL) said, “In March 2014, we received a tax assessment from the French tax authorities. We believe an adequate provision has been made and it is more likely than not that our tax position will be sustained. However, it is reasonably possible that resolution with the French tax authorities could result in an adjustment to our tax position.”
In February, French magazine Le Pointe suggested that the search engine giant’s back taxes could be in the range of €500 million up to €1 billion. Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) still has the opportunity to challenge the tax assessment of the French tax authorities since it not final. The tax assessment includes several years of back taxes, according to Wall Street Journal based on information from a person familiar with the situation.
In a statement, a spokesperson for Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) said the company is reviewing the tax assessment. The search engine giant said it paid all of its tax responsibilities.
Aside from Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL), other technology companies such as Amazon.com, Inc. (NASDAQ:AMZN) and Microsoft Corporation (NASADAQ:MSFT) also faced a similar problem in France. Last year, the e-commerce giant stated that it will dispute the government’s $250 million tax demand for its alleged back sales taxes from 2006 to 2010.
Separately, the search engine giant together with Apple Inc. (NASDAQ:AAPL) Intel Corporation (NASDAQ:INTC) and Adobe Systems Incorporated (NASDAQ:ADBE) agreed to settle the $3 billion anti-poaching class action lawsuit filed by Silicon Valley engineers and other tech workers.
The principal terms of the settlement will be disclosed by the parties involved in the case by May 27, and must be approved by United States Judge Lucy Koh of the Northern District of California.
