Google agreed to pay almost €1 billion in France to settle a fiscal fraud probe into whether it had dodged taxes in the country, ending a four year dispute.
The investigation by country’s finance ministry found the tech giant had failed to declare parts of its activities in France. As part of the settlement, Google agreed to pay a fine of €500 million and additional taxes of €465 million, the company said in a statement sent to Mobile World Live.
With its European operation headquartered in Dublin, Google is known to report most of its sales in the Republic of Ireland, meaning it pays little tax in most other European countries thanks to a loophole in international tax law.
In its statement, Google added: “We continue to believe that the best way to provide a clear framework for companies that operate around the world is co-ordinated reform of the international tax system.”
The French deal is arguably a win for Google: authorities were initially seeking €1.6 billion and had ruled out a settlement with the company.
But, the agreement could have wider ramifications for other tech players operating in France.
Speaking to Le Figaro, Minister of Public Action and Accounts, Gerald Darmanin, said the settlement created a legal precedent and discussions were already underway with other companies.
The French probe was one of several investigations Google has faced in Europe in recent times.
In July 2018, the European Commission (EC) levied a €4.3 billion penalty on the company after ruling it had abused the dominant position of its Android operating system.
Google also received a €2.4 billion fine from the EC for illegally promoting its own shopping comparison service.