In an ongoing tax row which has spilled over from the UK across Europe, France has vowed to slap search giant Google (GOOG) with a much steeper tax rate than the UK.
Ruling out any and all negotiations over a back tax deal, the French finance minister said that the UK’s $146 settlement was ‘more a product of negotiation than an application of law’.
Stating the French tax authorities do not negotiate but apply the law equally, he vowed that the bill in France would be much bigger than what they had paid in the UK.
The move by France risks worsening the row over the UK tax deal, which London Mayor Borris Johnson labelled “derisory”. The European Commission, head of regulating competition in the EU, said last week that it will review the UK’s decision after complaints from some political parties that it constitutes a violation of the law.
The comments also indicate a general turning of the tide in EU member states towards so-called ‘sweetheart deals’, whereby special arrangements are made for certain companies. Apple (APPL), Facebook (FB), and now Google have all come under the microscope in recent times, with some governments showing an increasingly intolerant stance towards any special tax arrangements.
Is this the beginning of an EU-Google fallout? It looks like it may be. France’s hard line stance has been echoed by several other politicians across the continent, and it’s unlikely that Google will get off so lightly in the future.