Google seems to be having some trouble with Europe’s tax laws. Last month, it was reported that Italian police suspect the company has evaded 227 million euros ($247.5 million) in taxes between 2009 and 2013. Now, French authorities have demanded that the tech giant pays 1.6 billion euros ($1.7 billion) in back taxes it allegedly avoided by using complex financial arrangements.
"As far as our country is concerned, back taxes concerning this company amount to 1.6 billion euros," an anonymous source at the French finance ministry said.
The demand comes after Google reached an agreement with the UK government last month to pay back 3 percent in tax, or £130 million ($181 million). The amount, which covers money owed since 2005, was criticized for being “disproportionately small,” especially considering that the UK is Google’s second-largest market.
French Finance Minister Michel Sapin has ruled out making a similar deal with Google, as he said the sums at stake in France were "far greater" than those in Britain, according to Reuters.
Google CEO Sundar Pichai has defended the company’s tax practices. "We're a global company. We have to abide by tax laws everywhere, we do abide by local tax laws in every single country," he said. "We're advocating strongly for a simpler global tax system," he added.
A number of US tech giants, including Apple, Microsoft, and Amazon, have come under fire from the European Commission for using a variety of methods to avoid standard tax rates across the continent. They often achieve this by basing their regional headquarters in countries such as Ireland, which has a much lower corporate tax rate than the rest of Europe. EU tax law states that companies don’t have to pay tax in a country where they don’t have a “permanent establishment.”
"If governments don't like these laws they have the power to change them," a Google Spokeswoman said.