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November 22, 2012

France says Google can’t win tax claim case

Google faces similar tax avoidance allegations in the UK too

By CBR Staff Writer

Amidst $1.3bn of tax claims by France against internet search major Google, country’s budget minister Jerome Cahuzac said that the company would never win a court case if it chooses to contest the tax bill claimed by French authorities.

Cahuzac said the tax authorities have "convincing" proof to back their claim against the search major, according to AFP.

The French authorities are talking to the company over the tax bill the company owes.

Adding to the woes of Google, the Paris-based news weekly Le Canard Enchaine has estimated that Google owed $2.17bn in taxes than previous estimate of $1.3bn.

The tax authorities have alleged that Google reduces the tax bill the country by shifting most revenue to a Dutch-registered company.

Google is also allegedly show the revenue to subsequently to Bermuda-registered holding company called Google Ireland , before reporting it Ireland which levies lower corporate taxes.

French tax authorities have also asked online retailer Amazon to pay $252m in pending taxes and interest.

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The tax authority claims that the company owes the money to the French government by shifting its profit to a Luxemburg holding to avoid taxes in the country.

According to the French authorities, the pending taxes include penalties and interest are based on its earnings in the country between 2006-10.

French authority alleged that Amazon has avoided paying corporation tax in France by shifting its profit to Luxemburg holding to take advantage of generous taxation policy there of non-domestic earnings.

Google faces similar tax avoidance allegations in the UK where it was reported to have paid only $5.4m in corporate tax last year on revenues of £2.5bn.

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