French authorities launched a surprise search of Google’s offices in Paris early Tuesday morning as part of an inquiry into the tech company’s tax dealings in France.
Prosecutors said in a statement that the raid, which also involved 25 computer experts, is part of an investigation launched in June 2015 into possible tax evasion and money laundering.
“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,” the statement read, as translated by The Telegraph.
Google’s regional headquarters are in Dublin, Ireland, where tax rates are lower than in France and other European countries.
“Google maintains that its large offices in Paris, London and other European capitals are not fully fledged businesses, but operate as mere satellites of its international headquarters in Dublin, providing back office services like marketing.
“Google routes most of its non-US revenue from activities such as advertising through Dublin, where the 12.5% corporation tax rate is low by European standards. The structure allows the company to avoid both European and US taxes on the income.”
Reuters says the company has routed those profits first through Ireland and then on to Bermuda to avoid taxes, a practice that has drawn criticism.
The French government is seeking €1.6 billion in back taxes from Google, The Guardian reported in February, citing an unnamed source at the French Finance Ministry. In January, Google agreed to pay £130 million in back taxes to the U.K. government.
“We comply with the tax law in France, as in every other country in which we operate. We are cooperating fully with the authorities in Paris to answer their questions, as always,” a Google spokesperson said in a statement emailed to NPR.