The French have long considered Google to a tax scofflaw but today went the extra step of both raiding the company’s offices in Paris and accusing the company publicly of “aggravated tax fraud” and organized money laundering.
Long held charges against Google come to a head
Quite simply, the search giant does not work with the impunity it enjoys in the United States when it comes to Europe. The Germans have led attacks on the company over alleged anti-trust and competition charges for years with other countries clamoring for reform from the company when it comes to privacy.
Now, according to the newspaper “Le Parisien,” France has upped its game with a raid of the company’s Paris headquarters in the wee hours of the morning. At dawn, roughly 100 investigators descended on the company’s offices. That number is believed to have included numerous members of the Paris police’s anti-corruption unit as well as as many as thirty IT experts.
“These searches are the result of a preliminary investigation opened on June 16, 2015 relative to aggravated tax fraud and organized 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 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 Ireland at issue
“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.
Essentially, France wants a fair bit of the money that Alphabet pays Ireland. The raid is also likely the result of Google’s willingness to pay about $140 billion in back taxes to the British, so investigators surely believe that Google will pay if its day-to-day operations are threatened. Google wisely pays the minimum in taxes by shifting profits to low-tax jurisdictions like Luxembourg and Ireland while doing business elsewhere.
In February, a report said that France was looking to stick Google with a tax bill for roughly 1.6 billion euros in back taxes the country believe it’s owed.
“We are cooperating with the authorities to answer their questions,” Al Verney, a spokesman for Google in Europe, said in an email.
Google Executive Chairman Eric Schmidt happened to be in Europe when the raids occurred Tuesday but declined to comment when questioned by reporters in Amsterdam.
In the States, Alphabet also released a statement that read, “We comply with French law and are cooperating fully with the authorities to answer their questions.”