Google will pay $1.10 billion to French authorities to settle a fiscal fraud probe in a deal that may create a legal precedent for other large tech companies present in the country.
French investigators have been seeking to establish whether Google, whose European headquarters are based in Dublin, failed to pay its dues to the state by avoiding to declare parts of its activities in the country.
The settlement comprises a fine of 500 million euros and additional taxes of 465 million euros, Google said.
Google pays little tax in most European countries because it reports almost all sales in Ireland. This is possible thanks to a loophole in international tax law but it hinges on staff in Dublin concluding all sales contracts.
The combined tax payment is less than the 1.6 billion euros France had been seeking from Google after the company’s Paris offices were raided in 2016. At the time, the ministry had ruled out settling with the company.
France has pushed hard for a digital tax to cover European Union member states, but ran up against resistance from Ireland, Denmark, Sweden and Finland.