The internet surfer googling for "France-negocier-Google" will be surprised to find first various versions of a news item heading "France proposes… / does not exclude… / about to… / budget minister willing to negotiate with Google" (25 July 2017), and immediately below "France Unwilling to Negotiate with Google" (2 February 2017).

The search algorithm did its job, the sources are trustworthy, so… nothing is wrong. Actually, many things can change nowadays within five months. Meanwhile, France has a new president - Mr. Macron, a European pragmatic, and Google has the confirmation of the Administrative Court of Paris that it does not have to pay additional taxes of €1.115bn, recently claimed by the government-unwilling-to-negotiate-with-Google.

Our case studies section presents in detail this ruling, by which the Court explains why Google Ireland (which operates Google throughout Europe) does not have a permanent establishment in France, and is thus not subject to additional taxes, besides those already paid by the Google France Company. (Error 404 – Why the French (Also) Could Not Find a "Permanent Establishment" of Google).

OK, will further ask our net surfer, but what can be still negotiated after the court ruling? Wouldn't it have made more sense to negotiate before the litigation? As the great French novelist Balzac would have said, "even a bad settlement is better than a good litigation" (Lost Illusions).

To cap it all off, the French Minister of Public Action and Accounts (each government has its own literature, but essentially he's the minister in charge of the budget) "we shall appeal against this ruling, because it's a matter of principle, but… if Google is willing to enter a sincere approach to the French government to regulate its status within the framework of a trading agreement wise for the company and for the public finances, our door is open. A good settlement is preferable to a bad litigation."

What hides behind this update of Balzac, behind this new view on the tax negotiation concept?
Even if the answer is not to be found at Google, it can appear by connecting the dots in the general picture, as we like to say in transfer pricing.

After January 2016, when the British tax authority announced a €130m agreement with Google to settle the financial quarrel, it became clear that this Google case is a touchstone for tax authorities throughout Europe, as each of them will face the same business model of the IT giant - invoicing in Ireland all the AdWords advertising services.

The French understood the political stake and announced they were playing the card of court litigation (obviously, Google has challenged the retroactive claim of one billion euros). Moreover, in May 2016, when the now-President Macron - was the minister of economy, news broke about a large-scale search at the Paris offices. (see "Operation Tulip" or how the French are searching for ”transfer pricing” on Google).

A force comprised of no less than 96 prosecutors and IT experts has been mobilized, but the consequences are still unclear. As resulting from the July 2017 ruling, the emails/documents seized by the authorities revealed that Google France employees were calling each other Sales Representative or Account Manager, which was still not enough to demonstrate that the Paris offices are a permanent establishment of Google Ireland (which would have resulted in the re-classification of the operations and implicitly in higher taxes - see the case study).

But things were to become more complicated for the French even before this ruling. In May 2017, news broke in Rome about the fiscal peace between the Italian authorities and Google on €306m, after "more than one year of negotiations". Negotiation, not divorce Italian style - here's more pressure for Paris who was unwilling to negotiate, but obviously has to produce results for the public eye.
Now, after the court ruling, such outcomes seem utterly "lost illusions." And yet…

If the litigations with Google are either lost or negotiated, it means there are no national solutions for the expectations of tax authorities, within the current laws. Here's one more political argument for speeding the implementation of a European solution. A solution called by one name only, and in the final negotiation phase on a EU level - the common, then consolidated corporate tax base (CCCTB).

By winning in national courts, Google and other large multinationals can only prepare faster to face a single set of rules on a European level, through which the economic substance, the functions, the risks taken by group subsidiaries, the arguments used to allocate profits to subsidiaries are ruled administratively. (here, on the CCCTB algorithm).

As early as last year, Google voiced in the European Parliament its concern about CCCTB increasing its operating costs in each EU member state. The French are the main driving force of restoring the CCCTB on the European Commission agenda (the European commissioner in charge of taxation, Pierre Moscovici, is ultimately a Frenchman). So you see discussion matters arise, because - as the action minister said - a good settlement is preferable…