The French Court Confirms That Google Ireland Has No PE In France

; posted on
April 30th, 2019

The Paris Administrative Court of Appeals confirmed a lower court judgment and struck down a reassessment of EUR 1.15 billion imposed by the French tax authorities on Google France which according to the authorities, constituted a permanent establishment in France for Google Ireland in relation to its Adwords services (search-based advertising).


Google Ireland Limited, headquartered in Ireland, is owned by a group of related companies located in various countries. It generates revenue in Ireland through Adwords service where the customers are French companies. These customers enter into contracts with them to access this service, either directly, online or after having been in touch with the employees of a company headquartered in France, the SARL Google France.

The French tax authorities asserted that Google had a permanent establishment (PE) in France. Under the tax treaty between France and Ireland Google will have PE if tax authority could prove that Google France LLC was under the control of Google Ireland Limited and that its employees had the power to enter into contracts on behalf of the Irish company. In this regard, advertisement agreements with French clients were formally concluded by Google Ireland, the French employees of Google France played a determining role in concluding such agreements.


The Court of Appeals, however, confirmed the lower Tribunal judgment and held that Google France only lent assistance to Google Ireland and therefore did not constitute a permanent establishment in France for Google Ireland. The Court based its conclusion on the fact that Google France (a) had no authority to legally commit Google Ireland, and (b) had no means to upload ads sold, which needed to be validated and uploaded by Google Ireland.

Source: Paris Administrative Court of Appeals

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