The constitutional Council has rejected the “Google tax” establishing a tax for the foreign multinational companies that practice tax optimization.
Por the withholding at the source, the leading measure of the budget in 2017, it goes. A priori. But it breaks for the Google tax. The constitutional Council, called to decide on some points of the finance bill 2017, has retoqué this device, the purpose of which was to counteract the practices of tax optimization of multinationals, such as Google. Built-in extremis to the budget in 2017 by an amendment to the socialist deputy Yann Galut, the Google tax was inspired by a 25% tax put in place in the Uk for 2015 on the ” profits diverted “.
Why the constitutional Council has-t-he censored a provision that would have reported a fortune estimated between 500 MILLION and 1 billion eur per year to the State ? The Sages argue that the tax administration may not have ” the power to choose the taxpayers who should or should not fall within the scope of application of the tax on companies “.
which may Include… ” As always, it is dressed a bit complicated, but in tax matters, it is always complicated “, plays Didier Maus, professor of constitutional law at the university of Aix-Marseille (Bouches-du-Rhône). Who deciphers : “The argument of the constitutional Council is that of equality : the law may not say certain companies will the regime 1 (editor’s NOTE : the tax on corporate classic, to 33 %), others in the regime 2 (the Google tax, with a rate of penalty to be 38 %), and the transition from 1 to 2 will depend on the good or the bad will of the tax administration. Legally, it is unstoppable… “
A bitter pill
Not enough to convince Yann Galut. “I’m angry, because it is a decision that is incomprehensible ! That keeps in the state a scandal tax : the multinationals pay only 3 % corporate tax through complex arrangements when our SMES pay 30 % ! “
The government had initially been very reserved about the Google tax. Recently, Michel Sapin, the minister of Finance, pointed out that it did not ” have been supportive “, considering that the current devices are sufficient. But finally, the amendment — passed unanimously of the members present, had been reworked with the support of Bercy. The catch ? “What has been invalidated had been added at the request of the government… “, says Yann Galut.
The pill seems to be all the more hard to swallow that in December 2014, already, the Wise men had censored an amendment on the reporting obligation of tax optimization schemes to the administration. “The constitutional Council has a conservative approach to the fight against tax evasion ! Or ultra-liberal, I don’t know… “, storm the deputy of Cher.
The decision is a victory for Google as for all the multinational companies transfer part of their profits outside France. The money spinning often to a destination — Ireland — where corporate tax is much milder than in France (12.5 per cent instead of 33 %).
The proponents of the fee Google will have to put the work back on the loom. The other solution is one… of tax harmonization within the european Union. It is not tomorrow the day before, say most experts.
” If we understand. “This is in substance what responded the members of the constitutional Council to parliamentarians, arguing that some provisions on the deduction at source of tax on income were” unintelligible “. For all this, the Sages have sifted through four points of measurement. To be clear, this fiscal revolution, expected to enter into force on January 1, 2018, is not at the shelter, in the year that opens, ” priority issues of constitutionality “. Many other aspects of the text could be the subject of appeal. Michel Sapin, the minister of Finance, he planned this war legal ? “There may be departments in which it will be difficult to occupy the five months that come, it will not be the case here…, î he told recently.