French police and prosecutors swooped on Google’s Paris offices on Tuesday, intensifying a tax-fraud probe amid accusations across Europe that the Internet giant fails to pay its fair share. They say that the company is now under investigation for aggravated financial fraud and organised money laundering.
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The French government is seeking €1.6 billion in back taxes from Google, The Guardian reported in February, citing an unnamed source at the French Finance Ministry.
France’s investigation is focused on an Ireland subsidiary that enables Google to do business with customers across the European continent while minimizing its taxes – a technique known as profit-shifting.
Google’s offices in Paris have been raided by police in an investigation into money laundering and “aggravated tax fraud”.
“This does not mean that Google will ultimately pay 1.6 billion”, the source told AFP. An Alphabet spokesman said: “We are cooperating with the authorities to answer their questions”.
The FT provides further detail on the French case, as well as the French government’s crackdown on McDonald’s France for alleged unpaid taxes. DGF believes that Google should be paying more taxes in the European nation as the firm has been doing more than tax-optimization strategies.
Google’s European operations are headquartered in Ireland, which has some of the lowest corporate tax rates in Europe.
Now, according to the newspaper “Le Parisien”, France has upped its game with a raid of the company’s Paris headquarters in the wee hours of the morning.
If staff in countries like France finalise contracts with local clients, then the company would be obliged to report the revenues nationally and pay taxes in each country.
Prosecutors working on behalf of the French state announced today (24 May) that it wants to search through the company’s records in Paris to determine whether the Dublin-based office holds a “permanent status” over the Paris office.
The internet giant is now certain to come under renewed, fresh pressure over its controversial tax affairs, which have seen its most senior executives in Britain hauled in front of parliamentary select committees to account for their legal avoidance measures. Its fellow Silicon Valley giants Apple, eBay, and Yahoo-among others-also make the long list of American multi-national corporations that have reportedly made use of global tax havens to save big.
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The French financial fiasco stems from a testy debate between Google and the United Kingdom tax authorities that went on for more than six years and ended with an audit settlement on back taxes earlier this year. This is possible thanks to a loophole in worldwide tax law but it hinges on staff in Dublin concluding all sales contracts.
