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Google search: Paris office raided in 'tax fraud and money laundering' probe

Published 24/05/2016

Google's Paris office was raided
Google's Paris office was raided

Google's Paris office has been raided by French police as part of an investigation into tax fraud and money laundering.

It is reported that 100 investigators entered the US internet giant's office in a dawn raid as Google stands accused of "aggravated tax fraud".

It comes as the firm faces mounting pressure over its tax affairs amid a backlash against corporate tax avoidance by multi-national companies.

Google agreed a controversial £130 million deal with HM Revenue & Customs in January to settle a 10-year tax inquiry into its UK business.

But EU competition commissioner Margrethe Vestager said she was considering looking into complaints that the settlement breached EU rules.

The French prosecutor's officer said the Paris 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 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."

In a brief statement, Google said: "We comply with the tax law in France, as in every other country in which we operate. We are cooperating fully with the authorities in Paris to answer their questions, as always."

Multinationals such as Google tend to base their European subsidiaries in Ireland or other low-tax jurisdictions such as Luxembourg to shift profits to countries where they pay less tax.

Chancellor George Osborne launched a so-called ''Google tax'' in April targeting firms that move their profits overseas.

The ''diverted profits tax'' is designed to discourage large companies from taking earnings out of the UK to avoid tax.

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