Render Unto Caesar…

Google’s Paris Headquarters was raided by French authorities

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I get it.

I TOTALLY get it. Paying taxes sucks, especially for the little guy, but when you’re a large corporation like Google, you’re expected to pay what the government thinks is your fair share.  When you don’t, the government may pay an unannounced visit and confiscate a bunch of data looking for information to support their ascertain that you aren’t.

On 2016-05-24, that’s what happened to Google in Paris, France.

Google’s Paris headquarters was raided by French authorities at 5am local time (11am EDT) by 100 investigators.  Based on an investigation that began nearly a year ago, information supporting tax evasion and money laundering was sought, according to Reuters.

French authorities are seeking nearly $1.76B in back taxes from Google and indicated that Google has “very aggressive” tax avoidance techniques.  Large corporations like Google often take advantage of loopholes in tax laws to avoid paying taxes in the US. This process often involves a number of different techniques including keeping cash in offshore banks to avoid paying larger sums in taxes.

According to Digital Trends, commonly employed methods include the “Double Irish” and “Dutch Sandwich.”  These processes have the avoiding company sending their profits through an Irish company who then routes the money through a Dutch company. The Dutch company then sends the money to a SECOND Irish company based in a tax haven.

Google recently entered into an agreement with the UK which ended a six year investigation with their tax authority.  In that agreement, Google agreed to pay $185M in back taxes to Her Majesty’s Revenue and Customs, and to revise its tax procedures indicating that it would “now pay tax based on revenue from U.K.-based advertisers, which reflects the size and scope of [their] U.K. business.”

This – the French – tax issue, is much more serious than the UK one, with Google owing up to an alleged €1.6B ($1.76B USD), according to a recent Reuters report.  How well France’s investigation fares is going to rely heavily on EU tax law which protects companies against paying tax in a country where they do not have a “permanent establishment.”

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