French investigators have raided Google’s Paris headquarters, saying the company is now under investigation for aggravated financial fraud and organised money laundering.
In a major escalation of France’s long-running enquiry into Google’s tax affairs, magistrates revealed on Tuesday that the software giant is suspected of evading taxes by failing to declare the full extent of its activities in the country.
Prosecutors said they want to establish whether the Irish company through which Google funnels the majority of its European revenues does in fact control a “permanent establishment” in France.
Google maintains that its large offices in Paris, London and other European capitals are not fully fledged businesses, but operate as mere satellites of its international headquarters in Dublin, providing back-office services such as marketing.
The company routes most of its non-US revenue from activities such as advertising through Dublin, where the 12.5% corporation tax rate is low by European standards. The structure allows the company to avoid both European and US taxes on the income.
Google released a statement saying: “We comply with French law and are cooperating fully with the authorities to answer their questions.” Investigators arrived at the tech firm’s offices in central Paris at 5am local time, with reports of around 100 investigators and five magistrates involved.
Source: All text from the Guardian
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