As a four-year investigation concluded over allege tax evasion and its inability to properly disclose taxes, San Francisco-based tech giant, Google, was ordered to pay a little less than 1 billion euros ($1.1 Billion) to the French authorities in back taxes. The total amount to be paid by the company covers €500 million in fines, as well.
The investigation in Google‘s inability to disclose its tax activities in France has been investigated for its alleged abuse over a loophole in the European taxation laws. The company has been evading taxes by running a shell company in Ireland and prevented paying taxes by invoking the Double Irish arrangement. The loophole has been described as the largest tax avoidance tool in history.
“We have now settled tax and related disputes in France that have persisted for many years. The settlements comprise a €500 million payment that was ordered today by a French court, as well as €465 million in additional taxes that we had agreed to pay, and that has been substantially reflected in our prior financial results,” Google said in a statement. “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 authorities initially hoped to collect €1.6 billion ($1.76 billion) as a settlement from the tech giant. France’s tax collection and fine settlement with Google is still bigger than the amount paid to a similar settlement the search giant paid to the United Kingdom for the same violation in the past. The U.K. only accepted £130 million (about $185 million) from Google for similar tax issues.
The settlement comes after the issue of digital tax become hot after the G7 meeting held last month in France, where a number of European companies have expressed their plans to tax big tech companies who conduct digital businesses in their regions. This move, however, has since been slammed by President Donald Trump for specifically targeting big American companies.