France makes £1.3bn tax demand on Google as Sundar Pichai lands in Paris

France has asked Google to pay €1.6bn ($1.8bn, £1.3bn) in back taxes, which is far more than the settlement reached between the search giant and the UK in January. France, Britain and many other countries have criticised the company over its use of complex corporate structures to minimise its taxes.

"As far as our country is concerned, back taxes concerning this company amount to 1.6 billion euros," an official at the finance ministry told Reuters. A Google France spokeswoman declined to comment on the amount but said the company has always followed tax rules in countries where it operates.

The news about the tax demand broke on 24 February, when Google's chief executive Sundar Pichai landed in France to meet Economy Minister Emmanuel Macron. Before the news broke, Pichai had defended the company's tax practices.

"We're a global company. We have to abide by tax laws everywhere, we do abide by local tax laws in every single country," Pichai said. "We're advocating strongly for a simpler global tax system," he said.

It is not known whether Pichai and Macron will discuss the tax demand at a scheduled meeting on Thursday 25 February. However, in January, France's Finance Minister Michel Sapin had ruled out a deal with Google. Sapin had said the sums at stake in France were "far greater" than those in Britain, which struck a deal with the company for £130m covering a 10-year period.

However, a source inside France's tax authority said: "This does not mean that Google will ultimately pay 1.6 billion.... There will be appeals, and perhaps a negotiation in the end, in particular on penalties."

The same day when France made its tax demand, MPs in the UK said the settlement reached with Google is "disproportionately small". Chancellor George Osborne said the deal would open the door to further agreements with other companies. The Labour Party, however, said the sum was "derisory" given the size of Google's business in the UK.

Google has its tax base in Ireland, where it pays very low rate of tax on its profits. Also, EU tax law protects the company from paying tax in a country where they do not have a "permanent establishment".