Tuesday 6 December 2016

Police probing Google's taxes raid Paris base

Michael Rose

Published 25/05/2016 | 02:30

(Stock picture)
(Stock picture)

French police have raided Google's Paris offices as part of an investigation into "aggravated tax fraud" and money laundering.

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The raid is the latest regulatory headache for the American search engine and email company. Like other Silicon Valley firms, it faces increasing questions about its complex tax arrangements.

France's financial prosecutor's office said the raids were carried out with the assistance of the police anti-corruption unit and 25 information technology experts.

French newspaper 'Le Parisien', which first reported the news, said the raid took place at dawn and involved some 100 investigators.

"These searches are the result of a preliminary investigation, opened on June 16, 2015, relative to aggravated tax fraud and organised money laundering, following a complaint from French fiscal authorities," the prosecutor's office said.

"The investigation is aimed at finding out whether Google Ireland Ltd is permanently established in France and if, by not declaring some of its activity on French soil, it has failed to meet its fiscal obligations, in particular with regard to corporation tax and value added tax."

Google and other American technology companies typically base their European subsidiaries in Ireland or other low-tax jurisdictions, such as Luxembourg, allowing them to do business with customers across the continent while minimising their fiscal obligations - a technique known as profit-shifting.

European regulators have increasingly pressed the firms to pay taxes in the jurisdictions in which they do business.

Google is under pressure elsewhere. Earlier this year, the company agreed to pay about £130m (€170m) in back taxes to the British government, a deal which drew the attention of European investigators.

Following yesterday's raid, Google said: "We comply with French law and are co-operating fully with the authorities to answer their questions."

The Paris raid is the latest in a number of moves in Europe against US multinationals that dominate the technology sector.

As tensions mount, a group of senior US senators yesterday warned they could impose retaliatory taxes against European firms operating in the US.

That was a response to what they claim are "improper" European Commission investigations into Apple and other American multinationals.

The senators , including chairman of the Senate Finance Committee, Orrin Hatch, called on the US treasury secretary to consider punitive taxes on European companies as a response to ongoing EU state aid probes into US tech giants.

Irish Independent

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