French investigators have raided Google’s Paris headquarters as a part of a probe into Google tax evasion and money laundering, the financial prosecutor's office revealed. The investigators arrived at the tech firm’s offices in central Paris at 5am local time. Around 100 tax and law enforcement officials are involved in the Google Paris Raid.
TAX SHAMING IN EU
The Google Paris Raid investigation aims to verify whether Google Ireland LTD has failed its fiscal obligations in France. Britain, France, and other countries from the EU have long complained at the way Google, Starbucks, Amazon, Yahoo! and other global firms generate profits in their countries but keep their tax bases in other countries, where corporate tax rates are much lower.
Although, in recent months, there seems to be a growing culture of tax shaming companies that are minimizing their corporation tax.
The European Commission is preparing to draft law to fight aggressive corporate tax evasion. Under the new set of rules, multinational companies will be forced to publish a country-specific breakdown of the profits they make and the taxes they pay. Pierre Moscovici, the EU’s tax policy commissioner has spoken in favor of public disclosure of tax affairs as a way to get more companies to pay taxes where they generate profits. The country-specific reporting would affect global firms with more than €750m in sales.
In 2015, France uncovered a stupendous 21.2 billion euros in tax fraud. More than a quarter of the sum came from tax-dodging big companies while 2.65 billion came from individuals with secret bank accounts in foreign countries. Not all money has been recovered yet.
Following the Google Paris Raid, the French state is seeking €1.6bn ($1.8bn; £1.3bn) in unpaid taxes. In January, post Google tax avoidance charges, it agreed to pay £130m in back-taxes to the UK treasury.