France will do everything in its power to ensure that the multinationals operating in the country pay taxes. The government said additional cases could follow after McDonald’s and Google were targeted with tax raids, said Michel Sapin the Finance Minister.
Sapin ruled out any negotiating for a deal with Google for its back taxes, as was done in January by Britain.
Dozens of police in France raided the Paris headquarters of Google escalating the investigations on tax evasion suspicion. Investigators searched the French headquarters of McDonald’s May 18 in another probe over taxes.
Raids during May by police as well as investigators from Justice build on work that was started by tax authorities as long as four years ago, when tax data was transferred to the judicial authorities that look into any criminal angle that is possible, added Sapin.
McDonald’s, Google and other firms that are multinational like Starbucks are coming under heaving pressure across Europe from governments angry and public opinion about the way the businesses exploit the global presence to minimize the amount of taxes they pay.
Google said it was complying fully with laws in France, while McDonald’s would not comment on the raid, referring questions back to its comments made previously that it was proud to be one of the largest taxpayers within France.
Sapin said he was not able to discuss what the sums were due to tax matters being confidential.
A ministry source however, said last February that tax authorities in France were seeking €1.6 billion or $1.78 billion in Google owed back taxes.
Asked if the tax authorities would be able to reach a deal with Google, Sapin said he did not make deals like the government of Britain did. He added that France applied the law.
Google in January agreed to pay over £130 million or $190 million to Britain in back taxes, prompting much criticism from lawmakers from the opposition that the sum had been far too low.
Sapin said there would not be any negotiations adding that there always existed the possibility of some adjustments that were marginal but that we are not in that logic.
Google, which is not under Alphabet Inc’s umbrella, pays very little tax in the majority of countries across European due to reporting the majority of its sales in Ireland.
That is possible because of a loophole in tax law but hinges on its Dublin staff concluding all is sales contracts.