Google Ireland - Administrative Court of Paris finds that Google through its contracting arrangements with French advertisers avoided a French PE

Google Ireland engaged Google France on a cost-plus-8% basis to provide marketing and other services to it in connection with earning “per click” revenues from French advertisers, who wanted their names and brief messages to appear with relevant Google search results. Although it appears that Google France was doing essentially all of the French work, all the contracts were signed by Google Ireland electronically, and Google France did not have the authority to enter into contracts in the name of or on behalf of Google Ireland. This was sufficient for the Parisian Administrative Court to conclude that Google Ireland did not have a permanent establishment in France, so that the French Service had to content itself with French income tax only on the 8% mark-up.

Neal Armstrong. Summary of Google Ireland Ltd. v. France (2017), No. 1505113/1-1 (Tribunal Administratif de Paris) under Treaties – Art. 5.