Investigators raid Google Paris HQ in tax evasion inquiry

Tue May 24, 2016 1:32pm EDT
 
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By Michel Rose and Chine Labbé

PARIS (Reuters) - Dozens of French police raided Google's (GOOGL.O: Quote) Paris headquarters on Tuesday, escalating an investigation into the digital giant on suspicion of tax evasion.

Google, which said it was fully complying with French law, is under pressure across Europe from public opinion and governments angry at the way multinationals exploit their presence around the world to minimize the tax they pay.

Investigators from the financial prosecutors office and France's central office against corruption and tax fraud, accompanied by 25 IT specialists, took part in the raid.

"The investigation aims to verify whether Google Ireland Ltd has a permanent base in France and if, by not declaring parts of its activities carried out in France, it failed its fiscal obligations, including on corporate tax and value added tax," the prosecutor's office said in statement.

Google, now part of Alphabet Inc, pays little tax in most European countries because it reports almost all sales in Ireland. This is possible thanks to a loophole in international tax law but it hinges on staff in Dublin concluding all sales contracts.

If staff in countries like France finalize contracts with local clients, then the company would be obliged to report the revenues nationally and pay taxes in each country.

Al Verney, a spokesman for Google in Europe, said in an email: "We are cooperating with the authorities to answer their questions. We comply fully with French law."

Alphabet Executive Chairman Eric Schmidt, approached for a reaction at a conference in Amsterdam, declined to comment.   Continued...

 
A Google carpet is seen at the entrance of the new headquarters of Google France before its official inauguration in Paris, France December 6, 2011. REUTERS/Jacques Brinon/Pool/File Photo