Finance minister Michel Sapin rules out UK-style deal with Google or McDonald’s and says more cases could follow

This article is more than 4 years old

This article is more than 4 years old

France will “go all the way” to ensure multinationals operating on its soil pay their taxes while more cases could follow after Google and McDonald’s were targeted in tax raids, the finance minister, Michel Sapin, has said.

Sapin also ruled out negotiating a deal with Google on back taxes, as Britain did in January. “We’ll go all the way. There could be other cases,” Sapin said.

Dozens of French police raided Google’s Paris headquarters on Tuesday, prompting an investigation on suspicions of tax evasion. Tax investigators searched McDonald’s French headquarters on 18 May.

The raids built on work started by tax authorities three to four years ago, when they transferred tax data to judicial authorities who look into possible crimes, Sapin said.



Google, McDonald’s and other multinational firms such as Starbucks are under increasing pressure in Europe from public opinion and governments angry at the way businesses exploit their international presence to minimise the tax they pay.

Facebook Twitter Pinterest The French finance minister, Michel Sapin. Photograph: Philippe Wojazer/Reuters

Google said it is fully compliant with French law while McDonald’s declined to comment on the search, referring to past comments that it is proud to be one of the biggest taxpayers in France.

Sapin said he could not discuss what sums were at stake because tax matters were confidential.

A source in his ministry said in February that French tax authorities were seeking about €1.6bn (£1bn) in back taxes from Google.

Asked if tax authorities could strike a deal with the tech giant, Sapin said: “We don’t do deals like Britain, we apply the law.”

Google agreed in January to pay £130m in back-taxes to Britain, prompting criticism from opposition MPs and campaigners that the sum was too low.

Google's tax deal with the UK: key questions answered Read more

Google, now part of Alphabet Inc, pays little tax in most European countries because it reports almost all sales in Ireland. This is possible thanks to a loophole in international tax law, but it hinges on staff in Dublin concluding all sales contracts.

The police raid was part of a separate judicial investigation into aggravated tax fraud and the organised laundering of the proceeds of tax fraud.

Should it be found guilty of that, Google faces either up to €10m in penalties or a fine of half of the value of the laundered amount.

A preliminary inquiry into McDonald’s was opened early this year after former investigating magistrate and politician Eva Joly filed a lawsuit in December on behalf of an employee committee, a judicial source said.

French business magazine L’Expansion reported last month that authorities had sent McDonald’s France a €300m bill for unpaid taxes on profits believed to have been funnelled through Luxembourg and Switzerland.

It said tax officials had accused the US burger chain of using a Luxembourg-based entity, McD Europe Franchising, to shift profits to lower-tax jurisdictions by billing the French division excessively for use of the company brand and other services. The judicial source confirmed the investigation was looking into this.

The government said this week it had received €3.3bn in back-taxes and penalties from just five multinationals in 2015.

“Nothing prevents big groups from coming to us and declaring their taxes,” Sapin said.