French authorities raid Google’s Paris office over taxes

24 May 201621 Shares

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100 agents of France’s tax authority have raided Google’s office complex in Paris regarding an investigation into accusations that the company is engaged in serious tax fraud.

The relationship between Google and some of the larger nations within the EU has been fraught, to say the least, with Dublin’s status as the company’s international headquarters meaning much of its revenue is sent through the Irish office to avail of the country’s lower corporate tax rate.

Now, according to The Guardian, Google’s French headquarters in Paris has been raided by 100 tax officials from the French government, which has said the company is now under investigation over accusations of money laundering and tax fraud.

Tax bill going back to February

This includes accusations of tax evasion, which relate to France’s previous claim back in February that Google owes the government around €1.6bn in unpaid taxes due to the company’s relationship with the Dublin office.

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 officials arrived at 5am local time (4am IST) and, of the 100 officials, 25 were brought in to access Google’s digital archive to determine whether the Paris office is more than a mere satellite office.

Google releases statement

Google has regularly stated that it does not legally consider its offices in Paris, London and elsewhere actual businesses connected with Google, but rather that they are providing services, such as marketing, with sales directed back to Dublin.

Earlier this year, news was revealed that, despite its UK operations generating close to €6.5bn in sales revenues, none of this amount was actually processed in London but in Dublin, meaning none of it returned to the UK government in taxes.

Meanwhile, back in France, multinationals are finding the country to be rather hostile territory regarding their finances, with McDonalds, too, finding itself on the end of a €300m tax bill over a similar accusation of it funnelling profits through Luxembourg and Switzerland.

Google has since issued a statement simply reading: “We comply with French law and are cooperating fully with the authorities to answer their questions.”

Paris image via Shutterstock

Colm Gorey is a journalist with Siliconrepublic.com

editorial@siliconrepublic.com