Jessica Fino 13 Jul 2017 12:53pm

Google wins £970m tax case in France

The tech giant has avoided paying €1.1bn (£970m) in back taxes after a French court ruled that its Irish subsidiary was not liable for tax in France

Last year, Google’s Paris headquarters were raided as part of an investigation into aggravated financial fraud and organised money laundering.

The prosecutor's office said at the time the searches were the result of a preliminary investigation opened on 16 June, 2015 relating to aggravated tax fraud and organised money laundering following a complaint from the French fiscal authorities.

But the French court said on Wednesday that it believed Google did not have a "permanent establishment" or sufficient taxable presence in France to justify the tax bill.

According to the BBC, the court said in a statement, "Google Ireland Ltd isn't taxable in France over the period 2005-2010.”

A Google spokesperson said, “After a thorough review by the Public Rapporteur, the French Administrative Court of Paris has confirmed Google abides by French tax law and international standards.

“We remain committed to France and the growth of its digital economy."

In the UK, the government received fierce criticism last year after it struck a deal with the multinational which would see it pay only £130m in back taxes covering a 10-year period.

In Italy earlier this year, Google offered to pay a tax bill of up to €280m to its tax authorities. It had been accused of avoiding €227m in taxes between 2009 and 2013 by channelling revenue through its operations in Ireland.

Meanwhile in Spain, the company's offices in Madrid were raided over discrepancies concerning its tax affairs.

The Spanish tax authorities suspected the company was not declaring some of its activities in the country. However, the investigators did not reveal how much they were seeking to recover.