French investigators raid Google's HQ in Paris in probe over tax evasion, money laundering

A Google carpet at the entrance of the headquarters of Google France before its official inauguration in Paris on Dec 6, 2011.
A Google carpet at the entrance of the headquarters of Google France before its official inauguration in Paris on Dec 6, 2011.PHOTO: REUTERS

PARIS (Reuters) - French investigators are raiding Google's Paris headquarters as part of a probe into tax evasion and money laundering, the financial prosecutor's office said on Tuesday (May 24), confirming media reports.

"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.

Investigators started their investigation of Google's offices in central Paris at 5am local time, a source close to the finance ministry said. 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.

Google fully complies with French law and is cooperating with the French authorities, a spokesman said on Tuesday in response to the ongoing raid. "We are cooperating with the authorities to answer their questions," said Mr Al Verney, a spokesman for Google in Europe, in an e-mail. "We comply fully with French law."

Google executive chairman Eric Schmidt, when approached for a reaction at a conference in Amsterdam, declined to comment.

Google has based its regional headquarters in Dublin where corporate tax rates are lower than elsewhere in Europe. The company, now part of Alphabet Inc, has been under pressure in recent years over its practice of channelling most profits from European clients through Ireland to Bermuda, where it pays no tax on them.

France is seeking 1.6 billion euros (S$2.5 billion) in back taxes from the United States. Google has been criticised for its use of aggressive tax optimisation techniques, another source at the finance ministry had said in February.

France, Britain and other countries have long complained at the way Google, Yahoo! and other digital giants generate profits in their countries but have their tax base in other countries, where corporate tax rates are far lower.

Google had agreed in January to pay 130 million pounds in back taxes to Britain, prompting criticism from opposition lawmakers and campaigners.