Nicola Sharp | 1 September 2016
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In a major escalation of France’s long-running enquiry into Google’s tax affairs, magistrates revealed that the company is suspected of evading taxes by failing to declare the full extent of its activities in the country.
Prosecutors said they want to establish whether the Irish company through which Google funnels the majority of its European revenues does in fact control a “permanent establishment” in France.
Google argues that its large offices in Paris, London and other European capitals are mere satellites of its international headquarters in Dublin, where most of its non-US revenue is routed to take advantage of the low 12.5% corporation tax. This allows it to avoid both European and US taxes on the income.
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