Net giants’ real tax bill is €800m

Google, Amazon, Apple, Facebook and Microsoft paid €37.5m tax but telecoms firms say they should have paid 22 times that

17 April 2013

GOOGLE, Facebook, Apple, Amazon and Microsoft paid just €37.5million in taxes in France in 2011 through basing themselves in low-tax countries – and a study has shown they would pay 22 times that amount if they were taxed here. That would bring in more than €800m.

French telecoms companies in the Fédération Française des Télécoms (FFT) say that they paid €1.2billion specifically in telecoms taxes and commissioned the study to highlight the difference in what they paid and that paid by the internet giants who use their networks.

The FTT added that these so-called “over the top” companies would also have paid between €400m and €700m in VAT in France if their businesses abided by French rules.

• Google declares €138m revenue in France and pays €5.5m in tax – but the FTT says its estimated real revenue in France is €1.4bn on which it would have paid €162m company tax.
• Apple declares €257m and pays €6.7m – but estimated real revenue is €3.2bn giving €317.5m in tax
• Facebook’s figures are not available but, based on UK figures, it would pay €50,000 tax, but estimated real revenue is €140m, giving €21.2m
• Amazon declares €110m and pays €3.3m but estimated real revenue is €890m, giving €10.9m
• Microsoft declares €584m and pays €22m but estimated real revenue is €2.5bn, giving €317m in company tax.

In total the companies declare €1.09bn in revenues in France and pay €37.5m in company tax. On their real estimated revenues of €8.13bn they would have paid €828.7m.

Google came in for particular criticism from the FTT for its use of “double Irish” and “Dutch sandwich” tax avoidance strategies – where it declares income in Ireland, after passing through companies in Hollande and its subsidiary Google Ireland Holdings in Bermuda. The arrangements are permitted by the OECD.

However, the internet search giant hit back saying: "We comply with French tax laws and contribute to the French economy by paying company tax and social charges. In addition, we employ 500 people in France, help tens of thousands of businesses to grow online and invest millions of euros in supporting French start-ups.”

A parliamentary commission looking at how internet giants avoid paying French tax is heading to the US soon for meetings with American tax officials.

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