A French court ruled on Wednesday that Google was not liable to pay 1.1 billion euros ($1.3 billion) in back taxes demanded by the French authorities. Kate King reports.
Google, 'Alphabet France Tax Bill' on Thursday and you'll see the tech giant has been handed a reprieve over 1.1 billion euros in back taxes. A French Court ruling on Wednesday that Google was not subject to corporate and value-added taxes for the year 2005-2010. For six years the French finance ministry has argued that Google owed tax because its subsidiary in Ireland has been selling advertising contracts in France through its Google search engine. SOUNDBITE (English) OANDA SENIOR MARKET ANALYST, CRAIG ERLAM, SAYING: "I think it's more a defeat for Europe than it is a boost for Google. We've got to remember that Google's balance sheet hugely substantial and even if it was forced to pay this fine in its entirety, it wouldn't really have much of a detrimental impact in the grand scheme of things. I think investors will be relieved for now. But for me what this just suggests is that this is likely to go on for a little bit longer." The court says 'Google Ireland Limited' doesn't have a permanent establishment in France or sufficient human resources in the country to justify the bill. France now has two months to appeal the verdict. And with its newly elected government cracking down on those not seen as 'paying their fair share' it's likely one will be lodged.