French Minister Says 'No One Wants a Long Litigation' with Google in Tax Bill Battle

Minister Gerald Darmanin said France will appeal the EU decision partially for public funds and partially on principle.

Author:: Kinsey Grant
Publish date:: Jul 24, 2017 2:51 PM EDT

French Minister of Action and Public Accounts Gerald Darmanin said France will proceed in appealing a recent French court decision ruling Alphabet's (GOOGL) - Get Report Google won't have to pay $1.3 billion in taxes based both on the necessity for the country's finances and on a "matter of principle," French finance news site LesEchos reported.

Darmanin said the current decision favors the "form" over the "substance," arguing the place of signature of a contract prevails over where the contract was generated, prepared, negotiated and executed. In this case, Darmanin said the French administrative court ruled that the fact the contracts were signed in Ireland was more important than whom the contract dealt with -- the French people.

France plans to "defend the opposite point of view" in appellate court. "Our objective is to collect the revenues corresponding to the real activity of Google in France," Darmanin said.

But Darmanin is not looking for drawn out litigation, saying it's best for the French government to "have a good deal" with Google. But he thinks the relationship must "work in both directions."

Alphabet stock traded slightly up mid-afternoon.

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