The debate over American corporation skipping out on their tax bills is getting serious as European leaders have started talking about serious things like actual trials. French Junior Minister for Budget, Jerome Cahuzac, is one of the people talking. At a press conference on Tuesday, Cahuzac said boldly that he had "the most genuine conviction" that Google would lose a court battle over the company's unpaid taxes. Cahuzac added that French authorities are currently in the process of negotiating the size of that tax bill. Local press pegs the amount at around $2.17 billion.
The figure shouldn't be a shock, if you've been following the tax-dodging escapades of companies like Google, Facebook and Apple. The fact that multinationals like to take advantage of tax loopholes by setting up world headquarters in countries with low corporate taxes like Ireland and the Netherlands, effectively skipping out on billions worth of taxes, is old news. Only recently, though, have we seen European governments not only protest the shady arrangement but take the companies to task over the unpaid taxes.
Just over a week ago, British lawmakers called Starbucks, Google and Amazon in for questioning about their tax-paying habits -- or lack thereof. Google paid only $5.4 million in taxes on about $4 billion in revenue last year after it, in the words of The New York Times, used "a variety of methods, including royalty payments to a unit in Bermuda, to reduce further the amount of money exposed to tax liability." Margaret Hodge, a member of parliament, said bluntly in the hearing, "We are not accusing you of being illegal, we are accusing you of being immoral."
France is sick of it. They've become become the first European country to hand Google a bill for unpaid taxes, and more tough talk from French leaders is undoubtedly on the way. We doubt the UK is far behind.