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France Slaps Google with Billion Euro Tax Bill



7:59 pm on Oct 31, 2012 (gmt 0)

[nytimes.com ]

What's up with France and Google? So they run all the AdWords money through Ireland. Ireland needs money too.


8:25 pm on Oct 31, 2012 (gmt 0)

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I think that there was a French backed "Euro" search engine called "Quero" (it meant something in Latin but was an unfortunate choice for an English speaking market) that crashed and burned. It was meant to be the European alternative to Google but it failed. The French seem to be a bit strange when it comes to the web - ironic as they had such a massive lead with the forerunner of the web.



8:27 pm on Oct 31, 2012 (gmt 0)

WebmasterWorld Senior Member leosghost is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month

"maïs soufflé" <= pop corn :)


8:38 pm on Oct 31, 2012 (gmt 0)

They're still mad that the Minitel dwindled out! But the Minitel was quite expensive I recall.

Actually I think the French are just trying to plug their gaping deficit hole. Increasing taxes on the rich won't do it and everybody else is taxed to the eyeballs. Google is an easy target.

I wonder what it will mean to AdWords in France.


9:22 pm on Oct 31, 2012 (gmt 0)

WebmasterWorld Senior Member leosghost is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month

Our current government is not made up of the sharpest knives in the box..direct taxes are not high..indirect taxes ( cotisations ) on businesses are incredibly high..
But there are no business people in our current government, who see businesses and the self employed as "vaches à lait" ( cows to be milked ) to pay for the salaries and pensions of civil servants ( of which France has a huge number, nearly 4 million even if you leave out the military ) and over 6 million of them retired..

We would have no deficit if it were not for the documented waste and corruption, primarily perpetrated by the members of the current Government and their friends when they were last in office, and their friends who are currently in office inn the regions..

But as they promised to "soak the rich and the evil businesses" ( and to get rid of the only government in 50 years who tried to rein in the waste and deficit and numbers of shiny trousered sinecured civil servants ) and give the money to the "down trodden civil servants"..it got them a lot of votes from that sector..enough to start looking for targets, and new cows to milk..

Having just given 7 Billion to their friends the bankers of the Peugeot car company..they now need to find some extra money..taxing G is legal under existing French tax laws* ( and G and others in the tech sector based in Ireland have been "taking the piss" tax wise over their operations in Europe ), and this will play well with an uninformed French audience..which has latent xenophobia ( especially towards non French multinationals ) which does not take much scratching to bring to the surface..

Minitel was very expensive and crap..minitel pron ( 3615 ) is what made the fortunes of the guys who are behind my French ISP ( Free )..I still have a minitel somewhere..

*French tax laws says basically that it is not where you base your company for tax convenience / avoidance which counts..If you do most of your business in France..or have an office in France ( Google does )..that it is in France that you'll pay taxes on any money gained from your French customers..

That is the way I'm taxed on my French business..
My UK business pays UK taxes on what it takes in in the UK from UK customers..
Likewise if I take in money from Irish customers vi a company in Ireland ( I'm Irish )..I'll pay taxes in Ireland..

It has always been that way..previous French Governments considered that although Google was "taking the piss" with their Irish operation invoicing everyone, but the actual business being done in each country such as France..that taxing them would probably net France less than turning a blind eye..

The new lot are desperate to raise money, ( because they are hiring new civil servants ( who will vote for them ) every day )..so they are now considering applying existing tax laws to Google..

Google's problem will be if the other EU governments decide to do the same, now that France may be beginning the process..Google pay very little tax at all in the UK ( despite making around 10% of their annual earnings there )..the USA may also decide to get tough on Google and MS and HP and other multinationals etc etc ..and tax them as they do other American businesses, rather than continuing to allow the sleight of hand that they allow at present of taking in money via Ireland and then moving it all over into tax havens in "bluewater lagoon banks"..

* disclaimer..I'm Irish..and my wife is a French civil servant..we are based in France..I am being objective, and providing some background..not political..


9:36 pm on Oct 31, 2012 (gmt 0)

WebmasterWorld Senior Member 5+ Year Member

^ An Irish Frenchman, that must be one heck of an accent. And people think the "Québécois joual" is difficult to deal with (not nearly as difficult as the Cajuns of course)!



10:41 pm on Oct 31, 2012 (gmt 0)

WebmasterWorld Senior Member leosghost is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month

<OT>Most here think from my accent that I'm American..a few get that it is Irish..and yet when speaking English.. I don't sound Irish, unless around Irish when the accent comes back.. a little..
Speaking English ( with no Irish present ) I have accent-less English..comes from moving around a lot...no regional accent had the chance to develop/imprint..

I have no trouble understanding Quebecois nor Acadian nor Cajun..nor any spoken or written French ( it's all "foreign" ;))..our son ( now 19 ) "metro" born..can't really follow spoken Quebecois, Acadian, nor Cajun..and even less the various versions of Creole ..many "metro" French have the same problem..
If what "Le Canard" is reporting is accurate..how it will play with the French population will depend entirely on how it is presented by the French TV, if they portray it as defending "French culture" against the American Google ( G has well over 90% search market share here ° it will go down very well with the over 40's..

Most French neither speak nor read English..( and of those who do, their actual level of comprehension of what they hear or read is not good, unless they have lived in English speaking countries, language education here was biased against learning English , and still is in many respects ) so their sources of information are limited to what the French media want them to see and hear..the French media are very much more friendly to the current government than they were to the last one..especially the state run media of the "France TV" group..

French companies ( especially those who import goods and sell to the French people ) and successive French Governments have taken advantage of this lack of international English language skills to keep the population very much in the dark about anything which does not suit them..only France produces TV or radio in French ( what is made in Quebec rarely gets here ) and ( outside ) English language news TV is usually very badly translated ( IMO deliberately )..even non news such as CSI and movies and even comic books such a Grimmy and video games are appallingly badly translated..

And yet France produces superb animators and FX programmers, and programmers in general..( who are very much in demand outside France ) But they can't easily get hired here..until they have worked abroad ( preferably in the USA ) at which point they become "in demand" here..

Most multinationals ( especially those in IT and "web" such as Ebay, G , MS etc ) find dealing with the French administration so complex that they either run their French operations from outside..or hand over control and distribution of "product" to someone here who speaks English and has some offices in Paris..and then stay "hands off" and let their "local agent" or "local office" run their French operation for them ..at which point they often wonder why they are not selling much..but don't realise that the "French office" has added a huge mark up to whatever it was, and so isn't selling as the foreign company anticipated..

That said..it would be nice ( and fair ) if G paid taxes on what they sold here ( ad space ) in the same way as I have to pay taxes here if I sell ad space..even if I invoice from outside France ( which I don't as the French tax authorities would be all over me for doing so )..and it would not be because I live here, but because I have an office / business premises here..as do Google..

It will be interesting to see if the mainstream French media give this any / much coverage and what it will be ..

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