French court annuls $1.27 billion tax adjustment on Google

PARIS – A French court has annulled a 1.11 billion-euro ($1.27 billion) tax adjustment imposed on Google by France’s tax authorities.

The French tax administration argued that Google had to pay taxes in France for the 2005-2010 period because the Californian firm and its Irish subsidiary have been selling a service for inserting online ads to clients in France for years through its Google search engine.

But the Paris administrative court noted Wednesday that the Irish company Google Ireland Limited doesn’t have a “permanent establishment” in France via the French company Google France, also a subsidiary of the U.S. group Google Inc.

The court added that Google France doesn’t have the human resources or the technical means to allow it to carry out the contentious advertising services on its own.