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Google must now pay the French government as much as $1.3 billion in previously unpaid taxes, following a government investigation into the company’s tax liabilities owed to French authorities.
The owed tax money was revealed in an April 28 report by Forbes, which stated that the exact amount of the additional taxes owed by Google could range from $693 million to $1.3 billion, based on multiple figures being reported in French media.
French authorities have been probing Google’s tax liabilities since 2011, when the French government raided Google’s Paris offices to comb through tax records in pursuit of unpaid taxes, according to Forbes. “For years, multinational companies like Google, Apple and Microsoft have been thwarting attempts by government authorities abroad to plow through complicated tax structures and pin down profits for purposes of determining corporate tax liabilities,” reported Forbes.
Those efforts in recent years are beginning to result in moves like the French action against Google.
The 2011 French raid of Google’s Paris offices was quite a move, with French revenue officers claiming “presumption of fraud,” according to Forbes. “
Google acknowledged the company’s French tax situation in a recent 10-Q filing with the U.S. Securities and Exchange Commission. “In March 2014, we received a tax assessment from the French tax authorities,” the company wrote in the 10-Q report. “We believe an adequate provision has been made, and it is more likely than not that our tax position will be sustained. However, it is reasonably possible that resolution with the French tax authorities could result in an adjustment to our tax position.”
Google did not immediately respond on April 29 to an inquiry from eWEEK about the French tax situation.
Forbes reported that Google is expected to appeal the French government’s actions.
Google’s foreign tax situation is just one of several overseas investigations and controversies that the company has had to deal with in recent years.
In January 2014, Google was fined $204,200 by France’s National Commission for Computing and Civil Liberties (CNIL) in connection with changes Google made to its data policies in 2012 that continue to be in conflict with the French Data Protection Act. The fine was the highest financial penalty assessed at that time for privacy violations by the French data protection agency.
The CNIL’s decision related to Google’s move back in March 2012 to merge many of the company’s privacy policies into one overarching policy for some 60 Google services, including Google Search, YouTube, Gmail, Picasa, Google Drive, Google Docs and Google Maps. The CNIL action to fine Google was taken because Google “does not sufficiently inform its users of the conditions in which their personal data are processed, nor of the purposes of this processing,” the agency reported.
In June 2013, Google was given 90 days by French regulators to amend its policies about how the company deals with users’ data or face large fines. Five other European Union nations made similar threats to Google. The deadline was issued by the CNIL at that time. In a statement, the CNIL told Google that it was taking the action because the company is not yet in compliance with French law.
The controversy over privacy and Google’s user policies has been simmering for some time. In May 2012, French regulators accused Google of not being cooperative with investigators looking into privacy issues concerning the company and its practices there. The CNIL had sent Google a questionnaire about the new privacy policy in March 2012, but the agency complained that Google’s answers were “often incomplete or approximate.” A follow-up survey also left questions remaining.
In April 2013, France and five other European nations announced that the slow pace of Google’s progress on privacy issues caused them to plan their own steps to ensure improved data privacy for their citizens. A European task force being led by the CNIL has been waiting since October 2012 for satisfactory progress from Google on how the search giant would make privacy improvements to protect users of its online services.
Google merged the 60 privacy policies to help break down the identity barriers between some of its services to accommodate its then-new Google+ social network, according to an earlier eWEEK report. Google’s streamlining came as regulators continued to criticize Google, Facebook and other Web service providers for offering long-winded and legally gnarled privacy protocols. The Google privacy policy changes went into effect March 1, 2012.
In April 2013, Google was hit with a $189,167 fine in Germany for collecting user data without fully disclosing the practice as Google Street View vehicles combed German streets collecting information for its maps from 2007 to 2010.
A similar case in the United States was resolved in March 2013 when a $7 million settlement was reached between Google and the U.S. government to end a probe into the Street View imaging program, which for three years collected personal information on users wirelessly as the Street View vehicles drove around taking photographs. The $7 million fine against Google was designed to resolve investigations that were under way by some 30 state attorneys general over the controversial Street View program.