France 'hits Google with
€1 billion claim' in content row
LATEST UPDATE: 31/10/2012
French tax authorities
have filed a €1 billion claim against Google to pressure the search engine to
pay a portion of its advertising revenue for access to French media websites, a
Paris-based newspaper reported on Wednesday.
By News Wires
French tax authorities
have made a billion-euro ($1.3 billion) claim against Google to pressure it in
a dispute over compensation to media websites, a French newspaper reported, a
claim denied by the US Internet giant's local arm.
The weekly Canard Enchaine
said in its edition to hit news-stands on Wednesday that the tax claim concerns
the transfer prices set between Google's Irish holding company and the French
unit for four tax years, without disclosing its sources.
French tax authorities
told AFP they do not comment on specific cases due to taxpayer privacy. Google
did not immediately respond to a request for comment.
A Google France spokesman
told AFP that the company had received no such notification.
"We continue to
cooperate with the French authorities as we have done till now," the
spokesman said in an email, stressing that "Google conforms with the
fiscal laws of all the countries in which we operate, and with European
rules."
The weekly said the tax
claim was brought up during Monday's meeting between President Francois
Hollande and Google chief Eric Schmidt, and that it was a bargaining chip in
the dispute with French media.
Hollande said the French
government would adopt a law if necessary to settle a dispute with French media
websites, which want the search engine to hand over a percentage of the
advertising revenue it earns from directing users to their content.
"If the negotiations
between Google and the media publishers don't result in a deal by the end of
the year, Google already knows what awaits it from a tax point of view: one
billion," said the weekly.
"Otherwise, there
will no doubt be room to negotiate."
In March, a source told
AFP that French authorities had made a tax claim against Google.
The weekly L'Express
reported the tax authorities were looking into whether Google had correctly
paid company and sales tax between 2008 and 2010.
Google uses a number of
measures to reduce the amount of tax it pays in France by funnelling most
revenue through a Bermuda-registered holding and then reporting it in Ireland.
According to estimates
Google generated between 1.25 billion and 1.4 billion euros in revenue in
France last year, primarily due to Internet advertising. It paid only a little
more than 5 million euros in tax, primarily due to the corporate tax.
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