Tax Treaty Case Law around the Globe 2020
1. Aufl. 2021
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S. 73Chapter 8 France: Taxing Digital Activities in a Pre-BEPS World
Marilyne Sadowsky
8.1. Introduction
This decision of the Administrative Court of Appeal (Cour administrative d’appel) in Sté Google Ireland Limited, released on , deals with the difficulties of taxing digital products and services in a pre-BEPS world. In particular, it addressed the question of under which conditions the limited company of Google France could constitute a permanent establishment of the Irish company of Google Ireland Limited (GIL). By answering this question, the Administrative Court of Appeal revealed the obsolete nature of the traditional criteria contained in the OECD Model Tax Convention for allocating taxing jurisdiction between states. This constitutes one of the first cases of the application of a new form of transaction, called a “public interest judicial agreement” (convention judiciaire d’intérêt public), under which the taxpayer pays a fine and, in return, the prosecutor accepts the end of the prosecution without conviction.
8.2. Facts of the case
GIL, a subsidiary of the US company of Google LLC, is an Irish company with its registered office in Dublin. Its main business is the sale...