The news came on the same day that the UK government released a report criticising UK revenue authority HMRC for allowing the internet company to pay just £130 million ($181 million) to cover a decade of back taxes.
“As far as our country is concerned, back taxes concerning this company amount to 1.6 billion euros,” an unnamed French official told Reuters.
France has made hefty tax demands from several multinationals in the past year. This has included charging HSBC €1 billion. Other multinationals, including Total, McDonalds and JPMorgan, have also come under scrutiny in the country.
In addition, France was last year ordered by the European Commission to claw back €1.37 billion from electricity provider EDF, which is 83% owned by the Government.
Google’s French premises were raided by the tax authorities in 2012.
UK implications
The demand, should it be substantiated, will put more pressure on HMRC and UK Chancellor George Osborne, who hailed the UK’s deal with Google as a “major success”. Critics said that the deal was “derisory”.
Meg Hillier, chair of the Public Accounts Committee (PAC) – which earlier this month pulled senior Google executives in for questioning – reacted by saying: “HMRC told the committee it would reopen its investigation into Google if new evidence came to light from other investigations by other tax authorities.”
“The UK is a much larger market for Google than France,” she continued. “We await the outcome of the tax received by the French with interest. HMRC maintains it gets better results through settlements than through the courts, but the PAC has long been concerned about the apparent reluctance by HMRC to prosecute.”
The news will make for a difficult first day for Edward Troup, who HMRC announced yesterday will become executive chair, and for Jon Thompson, who will replace the outgoing Lin Homer as chief executive at HMRC.
Osborne’s opposite number in government, Shadow Chancellor Jon McDonnell, said: “It is vital that George Osborne gets a grip as these companies have been getting away with paying very little for way too long.”
More to follow…
Read more: How multinationals can prepare their French subsidiaries for raids.
