

French Government Seeks To Charge Google 1 Billion Euros in Taxes - antr
http://www.nasdaq.com/article/french-government-seeks-to-charge-google-eur1-billion-in-taxes---report-20121031-00120#.UJEf87Td6-I

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guylhem
When you owe someone 10'000 Eur you have a problem.

When you owe someone 1 Billion Euro, _they_ have a problem.

With the european regulation protecting interstate commerce, the Double Irish
even with a Dutch Sandwich seems legally fine. It will take multiple lawsuits
to try to do anything against it.

Note to north american readers- there's a huge political effort in europe,
instrumented by the french and german government, to create a new kind of
copyright for indexing new articles, ie arrange a special tax scheme to divert
money from search engines to the european media companies.

It's just yet another case of entitlement from companies whose business models
have mostly been made obsolete.

So this news seems to be just part of the smear campaign, maybe to put more
bargaining chips on the table and strongarm google into accepting this. The
lows in google stock also frequently made the news these last few weeks - it's
more than a coincidence when you consider the emerging difference between
french/german newspapers and other news sources on this same fact, and who
owns the newspaper.

Good luck to France- she will need it to pull something out of so many
shenanigans.

(But deep inside me, I'd love to see the negotiations break, with google
removing all french newspaper from google news and see how long the european
media companies will last before giving up in their stupid demands while other
french-language news source eat their cake - from Quebec or North Africa. That
would send the right message to the government - stop messing with the
economy)

~~~
thwest
The production of news content -- like aid to the destitute or the military --
might be an obsolete business model but is still an essential social good
worth protecting.

~~~
civilian
Just because we don't want newspapers subsidized by the government doesn't
mean we don't value news content. This is a fallacy that statists have been
making for centuries-- you're confusing the values of society with the values
of government.

~~~
esrauch
The issue is that without the state to subsidizing it and if the content is
freely available through other intermediary companies, then there is no
apparent way to cover the costs of media production.

When you write what appears to be "I think all currently viable options for
funding serious news production are inappropriate", then it doesn't sound like
you value news content. That is honestly an attempt to not strawman you, just
a (perhaps confused) understanding of your seemingly untenable position. If an
alternative to state funding is viable while still allowing free aggregation
and distribution by arbitrary third parties, I am definitely interested in it.

~~~
TruthElixirX
Then don't make it freely available. If your content is so valuable, paywall
it.

~~~
esrauch
You wrote 10 words, but I'm going to reply with a wall of text anyway. I
believe the value being discussed above is the value to society of having a
well educated populace, which is notably different than the perceived economic
value to any individual; the main justification for taxes existing in any form
is that there are many cases where people spending their money without
intelligent self interest is for the best interest of everyone, _including
themselves_ (it's trivial to show how this can be true, see the prisoners
dillema).

Having an educated populace has enough value that we have public schools; I
don't see how informing adults is any different.

Note that I think there are also a ton of unrelated recent societal changes
that make it not economically feasible for the news to be behind a paywall;
notably that recent shifts that have dramatically reduced cost of publishing
and aggregating have made it extremely easy to republish other journalists
work trivially. All you need to do is have a subscription to the NYT paywall
and one guy getting paid shit to reword their articles; to any other user they
will choose the free content that has the same core information that the other
site could never have afforded paying for investigative journalism. Patents on
reporting facts are obviously untenable, so I see no real option other than
the state supporting the media.

------
CaptainZapp

      France for the past four years, weekly newspaper Canard Enchaine reports Wednesday without citing sources.
    

Er, Canard Enchaine is a satirical paper. Quite good, usually, in annoying
politicians.

I would read this news with a barrel full of salt.

<http://en.wikipedia.org/wiki/Canard_enchaine>

EDIT: Added Wikipedia link

~~~
thomasjoulin
While satirical, they specialize in investigations, especially related to
insider knowledge and whistle blowers. Only the tone is not serious, the
content is alway backed with proofs.

Le Monde, an authoritative newspaper as well as others picked up the news too
[1]

The Google News issue seems a different matter, the billion in question is due
to an (alleged) tax fraud using the technique of the Double Irish with a Dutch
Sandwich [2]

[1] (fr) [http://www.lemonde.fr/technologies/article/2012/10/30/le-
fis...](http://www.lemonde.fr/technologies/article/2012/10/30/le-fisc-
francais-pourrait-reclamer-un-milliard-d-euros-a-google_1783397_651865.html)

[2] <http://en.wikipedia.org/wiki/Double_Irish_arrangement>

~~~
patrickaljord
How is that a tax fraud if it's legal? One of the goal of the EU is the
ability to operate a business from one member state to another without any
taxation or customs fees. So asking Google to pay these is ridiculous.

~~~
brazzy
The goal is allow businesses to operate between member states as easily as
within them, which includes preventing _double_ taxation. The Double Irish
thing is exploiting a loophole created by the combination of such EU
regulations and peculiarities of the Durch and Irish tax codes, to effectively
avoid taxation entirely, which may not be against the letter of the law, but
certainly against its spirit.

It's quite possible for such things to be retroactively declared invalid, such
as in the case of Hoolywood's "stupid German money":
[http://usatoday30.usatoday.com/money/media/2003-08-11-hollyw...](http://usatoday30.usatoday.com/money/media/2003-08-11-hollywood-
germany_x.htm)

~~~
mbreese
This is true, but Google is hardly the only company using these loopholes in
the EU. It makes little sense to make them an example, unless you were also
trying to pressure them on another front (newspapers).

~~~
Evbn
Why not go for the best biggest payday and make a lesson for everyone else to
fall in line?

~~~
magicalist
well, at least Apple and Microsoft would make for bigger paydays, and I'm sure
there are more. Apple obviously has far higher revenue and profits, and they
earn the majority of both abroad.

It is possible they'll go for all the big players, though, who knows.

------
jobu
The newspaper-linking tax seems just plain stupid to me. Can't the newspapers
just ask Google to remove their content if they don't want it being used for
free? Am I missing something about how Google News operates?

France's newspapers are suffering the same as newspapers anywhere, but France
is more than willing to prop up a failing industry any way they can instead of
forcing them to modernize.

~~~
macspoofing
> Can't the newspapers just ask Google to remove their content if they don't
> want it being used for free?

They want to have their cake and eat it too. They want to remain on the index
for visibility and ad revenue, but they also want google to pay for the
privilege.

------
AndrewDucker
Good luck with that. The European Common Market legislation means that selling
services from Ireland to France is incredibly well protected.

~~~
benbataille
Indeed, it is. As long as you operate from Ireland that is.

The French tax authorities apparently have proofs that the whole business is
done in France by employees of Google France but billed in Irland. So,
technically, if I understand correctly, Google France is accused of paying
Google Irland for prestations that don't exist since they haven't been done by
Google Irland and that's illegal.

Summing undeclared revenues and penalties and considering the size of Google,
I'm not overtly surprised it reaches one billion. I guess Google is going to
contest the validity of the tax authorities proofs and it's going to languish
in courts for some time until they eventually decide to settle on a lower
figure.

Considering that this whole tax dodging is clearly gaming the system, I'm
certainly not gonna shed a tear for them anyway. If you do business in a
country, it seems only fair to pay its taxes.

------
abhimishra
This basically seems like a tax on hyperlinking, which is at the core of the
web. Absurd.

A Forbes article
(<http://www.forbes.com/sites/timworstall/2012/10/30/explainin...>) explains
further that the complaint from French publishers is about the portion of the
search results page that shows links to those publishers' content (since that
results page has ads on it). They could exclude themselves from indexing
easily (and forego traffic of course).

------
kiba
_Officially, Mr. Hollande and Mr. Schmidt discussed a bill being evaluated in
France to make Google pay to for the right to cite news articles from French
newspapers. Google opposes the proposal and warned it would exclude French
cites from its search engine if France implements such a law._

French cities?

~~~
mercurial
Obviously a type for sites.

~~~
mcdoh
typo?

------
macarthy12
The "real corporate tax rate" in France is lower than the so-called low Irish
rate.

[http://www.fixmytax.com/index.php/fix-my-tax-
blog-2/27-frenc...](http://www.fixmytax.com/index.php/fix-my-tax-
blog-2/27-french-proclaim-their-low-corporate-tax-rate.html)

------
davidhunter
Chief Executive Eric Shmidt ? I thought he was no longer CEO.

~~~
testing12341234
Eric Shmidt is the "Executive Chairman", but this was sourced from a French
newspaper, so it is likely a translation issue between French and English.

------
grecy
Does anyone else think it's a crime that Google, Apple, etc. avoid paying
corporate taxes and they should be stopped?

These companies benefit greatly from public services like public transport,
electricity, police, fire, roads, etc. but then use loopholes to avoid paying
taxes for them.

At the end of the day, this just results in billions of dollars higher private
profits and crumbling infrastructure and social services for America.

The only possible long-term outcome is collapse.

~~~
dscrd
>Does anyone else think it's a crime that Google, Apple, etc. avoid paying
corporate taxes and they should be stopped?

Well, technically, if something has been declared a crime then doing that is a
crime...

Is dodging taxes wrong? Of course it is! It gives an unfair advantage to those
who can dodge taxes, and that has nothing to do with serving the customer
better, delivering a better product or being innovative.

Nevertheless, trying to collect taxes from four years back is also one sort of
unethical.

------
ramblerman
This article calls Eric Schmidt the 'Chief Executive'

I thought he stepped down last year and Page took over that role?

------
accountoftheday
I hope Dow Jones realizes that Le Canard enchaîné is publishing satire.

------
jasiek
Wait, are they trying to retroactively extract taxes?

~~~
chollida1
I don't really think they have the legal ability to do this given the EU rules
in place however, the government can go back and reassess a tax filling.

I live in Canada and I believe they have up to 7 years for which they can go
back and audit you.

------
mtgx
Did Google avoid paying taxes through some loophole? If so, fine, charge them.
But I fear this is just a scare tactic, or rather a punishment tactic from the
French Government, because Google doesn't want to pay the French newspaper,
and I know the Government wants them to do it, too.

So if they would be honest about this, they would go after everyone that uses
the tax loophole, if there is one. But I think they only have Google on sight.

