French court exempts Google from back taxes

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A French appeal court has ruled in favor of Google on Thursday, saying it will not have to pay 1.1 billion euros ($1.22 billion) in back taxes demanded by French authorities.

The latest ruling comes at a time France is trying to crack down on digital service giants and the tax they pay, with the planned introduction of a French levy and as it pushes for broader international reforms.

The back tax case centers on a claim by the French finance ministry that Google had declared advertising revenue in Ireland which had actually been earned in France, thus avoiding paying corporate tax and value-added tax between 2005 and 2010.

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But the appeals court in Paris said it agreed with an earlier ruling that favored the U.S. company and argued that Google Ireland Limited did not have a “permanent establishment” or sufficient taxable presence in France to justify the bill.

Yetunde Adegoke

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