Google lands in trouble: French tax police raid firm's Paris offices

A source close to the matter said in February that French authorities believe the Google group owes 1.6 billion euros in back taxes.

AFP May 24, 2016 22:12:47 IST
Google lands in trouble: French tax police raid firm's Paris offices

Paris: French police and two dozen computer experts raided Google's Paris offices Tuesday in a fraud probe, with the US Internet giant already suspected of owing 1.6 billion euros ($1.7 billion) in back taxes.

The French authorities suspect Google of "aggravated tax fraud and conspiracy to conceal (it)," the national financial prosecution service (PNF) said in a statement.

Google is one of several multinational corporations that have come under fire in Europe for paying extremely low taxes by shifting revenue across borders in an often complex web of financial arrangements.

Google lands in trouble French tax police raid firms Paris offices

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A Google spokeswoman told AFP: "We respect French legislation and are fully cooperating with the authorities to answer their questions."

The PNF said police, tax officials and 25 computer experts took part in the raid.

A source close to the matter said in February that French authorities believe the Californian group owes 1.6 billion euros in back taxes.

Its European operations are headquartered in Ireland, which has some of the lowest corporate tax rates in Europe.

The PNF said the probe, launched in June 2015, aimed to "check" whether Google Ireland Limited, "by not declaring part of its activity carried out on French territory... has failed in its tax obligations, notably in terms of company tax and value-added tax".

Google France received a "notification" of the investigation back in March 2014, which did not give any precise figures.

Its offices have been raided by French authorities before, in June 2011, during an investigation into transfers to its Irish headquarters.

In January, Google agreed to pay £130 million (170 million euros, $190 million) in back taxes in Britain after a government inquiry sparked by a public outcry.

Italy has demanded more than 200 million euros from Google, which is accused of perpetrating tax fraud there for years.

Friendly 'tax rulings'

Authorities in the United States and several European countries have begun cracking down on so-called "tax optimisation" practices thought to rob their coffers of billions of euros in potential revenue every year.

The European Union has also been investigating "tax rulings" by some member states that benefit multinationals.

Brussels is probing online retailer Amazon's tax arrangements in Luxembourg, one of a series of such probes targeting major global firms, including Apple, Starbucks and Fiat.

Google CEO Sundar Pichai defended the Internet giant's tax practices during a visit to Paris in February.

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

"We're advocating strongly for a simpler global tax system," he added.

France has previously refused to negotiate the amount of back taxes it would request.

However, a source inside France's tax authority said in February that bargaining may still be possible.

"This does not mean that Google will ultimately pay 1.6 billion," the source told AFP. "There will be appeals, and perhaps a negotiation in the end, in particular on penalties."

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