GOOGLE, the international search engine company, had their Paris office raided on May 24 by French investigators, and are now allegedly under investigation by tax officials for aggravated financial fraud and organised money laundering.
The raid follows a long standing investigation into the software giant’s tax affairs. Google have maintained that its large offices in Paris, London and other European capitals are not fully-fledged businesses, but operate as satellites of its international headquarters in Dublin, providing back office services like marketing.
However French officials are determined to unearth any tax evasion and claim that Google is suspected of not declaring the full extent of its activities in France. An official investigation was opened in June 2015.
In February 2016 it emerged that the country was seeking €1.6 billion in back-taxes from the Irish branch of the American company.
French prosecutors have stated that they wish to establish whether the company, through which Google funnels the majority of its European revenue, does actually control a ‘permanent establishment’ in France.
Google has previously come under fire from the media, and negative widespread public opinion about their tax machinations.
The company routs a large part of its non-US revenue from activities such as advertising through Dublin, where the 12.5 per cent corporation tax rate is relatively low in comparison to European standards. This structure allows the company to avoid both European and US taxes on the income.
Google have currently released a statement reading, “We comply with French law and are cooperating fully with the authorities to answer their questions.”