The French tax authorities are claiming €1bn from Google after completing an investigation of its tax strategies.

According to Agence France Presse, Google  reported €192.9m of revenue in France in 2012, and paid just €6.5m in tax on a net profit of €8.3m.  Media reports state that much of Google’s French revenue passes through a Dutch-registered intermediary and then to a Bermuda-registered holding, Google Ireland Limited, before reporting it in low-tax Ireland

Industry analysts estimate that Google generated between €1.25bn and €1.4bn in revenue in France in 2011, mainly from internet advertising.  Anyone can see it should be paying more tax in the country where it is profiting.

It’s good to see the French authorities clamping down on Google’s tax approach, just as the country’s privacy regulator has led the fight against Google’s privacy policy.  It begs the question what is the UK going to do?  Will HMRC take similar robust action on tax?  After all, Google’s UK income tends to end up in other countries with lower taxation also.  Will the Information Commissioner’s Office, the UK equivalent of CNIL, continue to do nothing about its privacy policy here?  Why are the French prepared to take on this internet giant when we Brits seem to be saying to Google that it can do whatever it likes – ignore our privacy laws and just feel free to move revenue out of the country to save on tax. This has to stop.

It’s time to join Margaret Hodge MP in standing up to Google.  Remember that story recently when the Treasury said that her stance on multinational organisations seeking to move revenues to the lowest tax jurisdiction would scare international business away from the UK?  Nonsense.  The French have considered this risk and obviously recognise that Google would lose over €1bn in revenues if it were to walk away from France, rather than abide by the rules accepted by French business.   Clearly Google won’t do that.  So what have we Brits got to lose by standing up to this organisation?  

Unless we emulate the French, we are allowing this foreign organisation to have a market advantage from which it can profit at the expense of our right to privacy and our tax rules.  Come on Britain, let’s follow the French on this one.  Let’s hit Google where it hurts – its pocket.