An extensive search was conducted, this Tuesday, May 24, at the offices of Google in Paris, as part of a tax fraud investigation, announced the financial parquet, confirming information from the Paris and World .
According to Le Parisien , not less than one hundred tax officials and law enforcement brigade of the great financial crime (BRGDF), including 25 computer experts and five public financial Parquet national, took part in this operation.
the search was conducted as part of an investigation opened in June 2015, “ on tax evasion facts aggravated and laundering by an organized gang of aggravated tax fraud , “said the financial parquet. The investigation was initiated following a complaint from the French tax administration, and “ aims to verify [Google Europe] , by not declaring a part of his activity carried out on the territory french, violated its tax obligations, including under the corporate income tax and the tax on the added value . “
in June 2011, already several searches and seizures had been made in the Paris offices of Google France, as part of an investigation into the “transfer pricing” between the French branch of the American company and the European headquarters, located in Ireland, a countries with of taxation on corporate profits (12.5%) among the lowest in the EU.
the subtleties of Franco-Irish tax treaty
the financial parquet precise in words that the investigation “ aims to verify whether the company Google Ireland Ltd has a permanent establishment in France .” Under this concept of “permanent establishment” is a concept of tax law, which is particularly on the tax treaty between Ireland – where is established the headquarters of Google Europe – and France (pdf). When a subsidiary of an Irish company is recognized as a “permanent establishment” in France, it is imposed by a regime similar to that of French companies.
But Google, as almost all the giants US headquartered is located in Ireland, leverages years of a specific provision of this agreement. The latter provides that if “ a fixed place of business solely for the purpose of advertising, supplying information, scientific research or similar activities of the company for a preparatory or auxiliary character “, the subsidiary does not constitute a permanent establishment. Google France, the bulk of the activity in France is to sell advertising, which also opened the scientific and cultural research centers in France, considers not to constitute a “permanent establishment”. What challenges the French tax authorities.
Under fire from critics in Europe
Google is within the scope of another tax investigation in France since 2011. In February, Reuters and AFP news agencies claimed that the French tax authorities demanded 1.6 billion euros in tax arrears Internet giant. The Finance Ministry does not confirm that figure, citing tax secrecy, as he refused to comment on the level of the fine to which the US giant could face. For its part, the search engine has continued to assert that “complied with tax laws in all countries in which it operates.” A new repeated line of defense on Tuesday, in a brief statement: “We respect French law and are cooperating fully with the authorities to answer their questions. “
In Europe, tax optimization of the American giant practices are under fire from critics. In January, the announcement of an agreement of 130 million pounds ($ 166 million) between HM Revenue and Google, to cover a tax dispute ten years, from 2005 to 2015, set fire to the powder. The amount was considered “disproportionately small compared to the size of Google’s business in the UK” , recalled Wednesday, February 24 British parliamentarians. In France, Finance Minister Michel Sapin, disputed any arrangement similar . “The French tax authorities do not negotiate the amount of taxes” , launched the Minister on February 2
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Google and other US corporations such as Amazon or Facebook are regularly accused of evading taxes, both the US and Europe, for example by choosing to s’ settle in countries where taxation is more favorable to them. Practices, do they defend, “tax optimization” .
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