Google Inc (NASDAQ:GOOG) has been in discussion with French officials regarding a tax bill that France claims the online company owes for its revenue that came from France. Now, as the estimated tax bill is now 70 percent higher than the original estimate, the French budget minister spoke out this week claiming that Google would not win any lawsuit claiming a lower tax bill or claiming not to owe the money at all.
French official Jerome Cahuzac said in an interview recently that he was convinced that the French government has a strong case to collect more than $2 billion in taxes from Google Inc (NASDAQ:GOOG), though he affirmed that talks were ongoing with the company that a settlement or resolution can be reached. Cahuzac said he had “the most genuine conviction” that the French courts would side with the government should Google decide to launch a legal challenge.
It is reported that Google Inc (NASDAQ:GOOG) pays all of its EU taxes through Ireland, which has a business-friendly corporate tax rate, by channeling its EU revenue through a Dutch subsidiary and then through a Bermuda-licensed Google Ireland Limited. Under current EU rules, taxes paid through one EU-member country accounts for all the company’s tax liability in the EU. However, the EU has been looking into the rules and how they apply to online businesses, and whether these laws apply correctly to companies that sell across international borders.
What do you think? Does Google Inc (NASDAQ:GOOG) owe the money? Should Google challenge in court, or come to a settlement? If Google winds up paying some percentage of this bill, how do you think this affects the stock for investors like billionaire Julian Robertson of Tiger Management? Is a bottom-line issue, or a public-relations and reputation issue for Google – where it may be acing charges of being a “tax dodger” or “tax cheat”? We’d like your feedback on this ongoing issue!