The headquarters of Google in Paris was raided by French authorities in connection with their investigation on allegations of “aggravated tax fraud” and money laundering against the search engine giant, according to the office of the financial prosecutor on Tuesday.
The raid in France is the latest regulatory problem confronting Google, which is now operating as a subsidiary of Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL), its parent holding company. Earlier this year, the tech giant agreed to pay £130 million in back taxes to the United Kingdom to cover its decade-long underpayment of taxes.
In February, it was reported that the French government wanted the search engine giant to pay €1.6 billion ($1.76 billion) in back taxes. The country’s Finance Minister Michel Sapin also previously rejected that idea of reaching a tax settlement agreement with the company citing the reason that the amount at stake was “far greater” than those in the United Kingdom.
Google Ireland is the focus of investigation
Recent reports indicated that Google avoided billions in taxes through its subsidiaries such as Google Ireland Ltd and Google Netherlands Holdings and used tax structures known as “Double Irish” and “Dutch Sandwich.”
According to the French financial prosecutor’s office, its investigation is focused in Google Ireland, and its objective is to verify whether the search engine giant’s subsidiary has a permanent base in France and if it has, it wants to find out if it did not declare some of its activities in the country and failed its fiscal obligations including corporate tax and value added tax.
The financial prosecutor’s office said, “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 financial prosecutor’s office raided the company’s headquarters in Paris with the help of the police anti-corruption unit and 25 information technology (IT) experts. A source close to the Finance Ministry told Reuters that the investigation at the company’s offices in Paris around 5:00 in the morning.
Google is cooperating with French authorities
Al Verney, the spokesman for the company in Europe said they are cooperating with the French authorities and answering their questions. He added that the company complies with the French law.
Google is not the only company facing similar regulatory problems in Europe. Apple (NASDAQ:AAPL) recently agreed to pay €318 million in back taxes to Italy.