And Google’s difficulties with European authorities continue. In a latest twist, a team of French investigators have raided Google’s Paris headquarters on Tuesday as part of a probe related to allegations of tax evasion by the Internet giant. As per sources close to the Finance ministry, back taxes to the tune of Euro 1.6 Billion were the chief objective of the raid.
The raid, which took place at around 0500 am (0300 GMT) at Google’s offices in central Paris, involved almost 100 investigators including around 25 computer experts.
As per a statement from the Prosecutor’s office,
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.
Apparently, Google has its regional headquarters in Ireland’s capital Dublin where corporate tax rates are lower than elsewhere in Europe. Using this tactic along with its global footprint, the company has been channeling most of the profits it receives from its operations in Europe from Ireland to Bermuda, where it pays absolutely no taxes on them — saving it billions.
Ironically enough, it was thanks to the Internet that the general public managed to catch up to Google’s cleverness — and sure enough, they weren’t pleased.
Speaking on the topic, Google said,
We comply with French law and are co-operating fully with the authorities to answer their questions.
Facing wide-spread criticism from the public and the government, Google had in January agreed to pay a sum of 130 million pounds in back taxes to Britain. However, the agreement wasn’t particularly amenable to the public and the opposition who thought that Google was being let off too easily. In fact, the UK Public Accounts Committee (PAC) said that the £130m settlement “seems disproportionately small“.
Well, let us see how things go in France where the investigations are still ongoing. The company already has a Euro 3 Billion fine imposed by the European Union, hanging over its head, so it’s probably not looking forward to paying out an additional 1.6 Billion.
Meanwhile just this April, the European Union unveiled plans to force companies with sales of €750m to provide the public with further details related with their tax affairs — particularly, how much tax they will have to pay in every single EU country as well as the activities carried out in tax havens.