French police began a raid at Google’s office at five in the morning on Tuesday (local time) in Paris, according to the newspaper Le Parisien. The attack involved five promoters, 25 computer experts, researchers from the French tax administration and central services for the prevention of financial corruption and tax crimes, revealed the French Attorney General.
Google’s finances are under investigation since last June, following claims by the tax authorities that the company was involved in a serious tax fraud. And last week the organization refused to pay a fine of French authority for data protection, for failing to comply with the rules of law to oblivion.
Google directs many of its advertising sales in Europe through its Irish subsidiary, profiting from the low tax rates in Ireland. Responsible for the tax authorities of other European countries have expressed concern with the consequent loss of tax revenue.
Direct profit for a low-tax jurisdiction, where it has a branch, is not necessarily illegal, if any plausible justification for the transfer. With services in cloud computing, such as programmatic advertising, it is much more difficult to determine where the work is done and where the service is delivered.
In January, Google came under pressure when he agreed to pay 130 million pounds in back taxes owed to the UK, concluding an investigation of ten years. Activists like John Christensen of the Tax Justice Network, said that the sum represented one of only 3% tax rate when the nominal tax rate was more than six times higher, close to 20%.
The French authorities believe that Google should 1.6 billion in back taxes. But unlike the UK tax authority, are inclined to negotiate an agreement, said the French press in February.
Microsoft has also been under tighter scrutiny of the French tax investigators. In 2012, nearly 100 tax officials and police raided a company office on the outskirts of Paris.
The authorities had discovered another company, Microsoft’s Irish subsidiary of invoices for services allegedly provided by employees of the French subsidiary.