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Google's French headquarters raided in tax probe

Published 24/05/2016

Google's offices in Paris have been raided by police
Google's offices in Paris have been raided by police

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

The raid is the latest regulatory headache for the US search engine and email company, which like other Silicon Valley firms, 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 in a statement.

"The investigation is aimed at finding out whether Google Ireland 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 US technology firms 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 £130 million pounds in back taxes to the UK government, a deal which drew the attention of European investigators.

Google's rivals have faced similar pressures. In December Apple agreed to pay Italy 318 million euro (£242 million) in taxes for several past years.

A statement from Google said: "We comply with French law and are cooperating fully with the authorities to answer their questions."

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