Google's Paris Office Raided By Investigators

[superclown2]

Not a lot of details at the moment, just a BBC news flash. It seems they're investigating a possible 1.6 Billion Euro tax fraud ..........

[superclown2]

A bit more info is coming in ...
[bbc.co.uk ]

[engine]

There's a little more appearing in the story about that. It suggests Google is accused of owing the French state €1.6bn, or $1.8bn in unpaid taxes.

Reports say about 100 tax officials entered Google's offices in central Paris early in the morning.

Police sources confirmed the raid, but Google itself has so far made no comment. Google's Paris HQ raided in tax probe [bbc.co.uk]

[Roman Abramovich]

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System: The following message was spliced on to this thread from: https://www.webmasterworld.com/goog/4806280.htm [webmasterworld.com] by engine - 5:21 pm on May 24, 2016 (utc +1)

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[bbc.co.uk...]

[jmccormac]

Seems the investigation began last June. This seems a relevant quote:
"The company, now part of Alphabet, has been under pressure in recent years over its practice of channelling most profits from European clients through Ireland to Bermuda, where it pays no tax on them. "

[rte.ie...]

This is probably going to upset a lot of Google fans if the French manage to get money out of Google over this issue.

Regards...jmcc

[engine]

Fans or not, there's a significant movement for business to pay their share of taxes.
I believe that loopholes are getting smaller, and that this is just another step towards closing them.

[jmccormac]

Yep but if the French get anything over the £130 million or so that the UK government managed to squeeze out of Google, then the UK may consider taking another look. The US government will also be watching these events with great interest. Google may be a highly profitable operation but how much of that is based on avoiding taxes?

Regards...jmcc

[blend27]

A brand new one would be appropriate in this case. Like someone once said: we all know what this is all about.

[creeking]

Reports say about 100 tax officials entered Google's offices......

was this live streamed? or is it on youtube?

:)

[caine]

Ashame that HMRC never kicked the door down asking where's our money! I hope the French are successful, and the UK goes at all these tax avoiding companies again, and again and pay there fair share into the pot for the UK revenue's they've reeped over the years. You've guessed it £130m is a piss in the ocean for what they should be paying.

[MrSavage]

I have my popcorn ready. I don't mind good cinema. I'm waiting for the apologist(s) to show up in this thread while this is unfolding. The pure part of me suggests this is just some sort of misunderstanding. I sure wouldn't want to be one of the agents on this raid (if you know what I mean).

[johnhh]

I love the French - they never just roll over and show their tummy like the UK does. A raid is a big thing, the French must have info to justify it. Plus.. I have never understood why the USA stood for it given the loss of tax revenue - must be all that lobbying.

<added> yes, yes I know... it may be legal - unless you can prove the sales actually don't occur in Ireland or other countries</added>

[tangor]

Until tax laws are changed (and the politicians get out of the loop) you can bet your bippy that anyone or any company will seek whatever relief from taxation they can. It's human nature. It is also human government nature to spend more than they have and come back or more.

[glakes]

Google may be a highly profitable operation but how much of that is based on avoiding taxes?

And how much of the remaining profits are based on manipulating industries and entire economies?

[goodoldweb]

Google are being pinguined by the french tax department...finally some great news. Lets see how they explain tax avoidance using the black box "Algorithm" excuse.

Youtube link anyone?... i'm getting the popcorn :)

[jmccormac]

Lets see how they explain tax avoidance using the black box "Algorithm" excuse.

I think that Amit Singhal had a post about why the European Commission was so wrong about taking action against Google a year or so ago and the post used some rather dodgy "statistics". To use a movie expression: Google has form. Don't be surprised to see a blizzard of bullsh*t from Google's friends in he media if the French manage to get more money out of Google than the UK.

[theguardian.com...]

"Google has apologised to the Guardian and Bild, after citing “nonsense” figures for the two sites’ traffic statistics in a response to the European commission’s antitrust charges against the company."

[googlepolicyeurope.blogspot.ie...] (with the correction lower down)

And there's still the European Commission actions against Google which could see it having to pay billions of Euro in fines. Being utterly cynical, it looks like open season on Google in the EU and various governments are looking to hit it for taxes that had previously avoided by careful tax planning. The key aspect seems to have been, (I'm not an accountant and don't play one on TV), where the revenue was booked rather than in which jurisdiction the transaction occurred. It would seem, from a non-expert point of view, that the various governments could point to the differing Value Added Tax rates that apply to each transaction as an indication of where the transaction took place. Thus if you are French and paid for Google Adwords in France, you may nominally be paying French VAT rates. If British, you pay UK VAT rates. If you are Irish, and VAT registered, you will pay VAT on Google Adwords and deduct that from VAT on your liable sales on following period VAT form.

Normally if you can provide a VAT number for business purchases in the EU outside your own country, you don't pay the VAT but have to account for it. Thus by looking at the VAT activity for Google, the tax authorities in various EU countries could see how much potential tax revenue they are losing due to Google's tax avoidance strategies. Tax avoidance is not necessarily illegal however with the Panama Papers and the various tax positions of large multinationals in the EU, there is increased interest in the activities of Google, Apple and others using EU countries to avoid tax.

A quote from the Guardian on the raid puts Google's activities into numbers:
"The company, according to recent reports, employs more than 700 staff in France. Google reported revenues of €216m for its French operation in 2014, paying €5m in tax. However, advertising researchers put its actual revenues at about €1.7bn for that year. "

That's going to upset a lot of people who think that Google can do no evil.


Regards...jmcc

[Simon_H]

Let's be absolutely clear here. Firstly, the French are not imposing a penalty on Google. It's a 'filter'. Secondly, once Google starts following the guidelines, the French should not release them from this filter and should continue charging them 95% of their revenue for at least 5 years.

[heisje]

Google are smart, but have got too smart for the taste of many people, for many reasons. Seems time to be outsmarted.

.

[EditorialGuy]

The raid smacks of political theatre. A hundred tax officials raiding Google's offices? Really? Did the raiders wear bulletproof vests or sleeve protectors?

[Walt Hartwell]

Political theatre?

While I wouldn't profess to know the "normal" procedure for seeking evidence from a multi-national company suspected of tax avoidance, I'd suppose there is a lot of information, files and hardware to collect. All while making sure no one accidently hits a "delete" button.

[MrSavage]

If this is political theatre, then I'm buying advance tickets for the next show. I have extra popcorn. I would be wearing face protection I'll say that much. You show your face in that place, they know everything about you right down to what you were shopping for just moments earlier. On the phone? They got you. Walking to car? They got you. Using the Google balloon? They got you. Shoot me fine. I'll cover my face if I'm going in there. More theatre please. I love to see the rise and fall. I still say they have done nothing wrong. It's just a big misunderstanding and their defense will be "Microsoft does the same thing". There is always a partner, it's better that way. I don't know why I'm obsessed with stains, but I kind of like this stain on the white fabric of Google. I don't call it political theatre, I just call it juicy entertainment.

[superclown2]

A hundred tax officials raiding Google's offices? Really?

This isn't some dodgy firm that might be fiddling a few thousand dollars. It's a highly sophisticated organisation which is being investigated worldwide for various 'alleged' massive misdemeanours. And the sum involved is 1.6 billion euros. That's about 1.8 thousand million US dollars.

100 inspectors for the day is cheap at the price.

[jmccormac]

The raid smacks of political theatre.

Well that clears it up. Just a bit of entertainment, is it? The French can close the investigation becase some random poster on a forum has said that everything is fine with Google.

Google of suspected of aggravated financial fraud and money laundering. This is a case involving the potential evasion of 1.6 Billion Euro in taxes. Now the British government is being called upon to revisit the settlement with Google.

[theguardian.com...]

Google's already paid a $500 million fine for drug dealing in the US. It had to settle for 130 million Sterling with the UK tax authority. The European Commission may hit Google for at least a 3.6 Billion Euro fine. This doesn't seem to be the record of an organisation that claimed that "Don't be evil." was its motto. Of course in October 2015, this may have been changed to "Do the right thing." with the value of 'right' being undefined.

And if this is just "political theatre", what's in the next act?

Regards...jmcc

[Shepherd]

This is impressive WebmasterWorld, never thought I would see the day that government strong-arm shakedowns were look upon so favorably...

[jmccormac]

Things have changed. Google made too many enemies and destroyed too many businesses. This whole tax avoidance thing has become a major political issue and it is also costing the US taxes since Google is limiting its US tax payments by using offshore companies. While avoidance isn't a crime, the political climate throughout the EU and the US seems to be shifting against tax avoidance by large multinational corporations and there does seem to be some consolidated effort to make Google pay taxes in the countries in which it operates. The European Commission fine for 3.6 billion Euro is not for tax evasion.

Maybe we've seen too many of our friends' businesses destroyed by Google and we've seen too many of our friends' websites demolished by Google's Animal Farm brainfarts. Perhaps some rejoice at this bit of Karma where Google gets it in the neck. Then again, some of us might just be enjoying the "political theatre" of it all. Ladies and gentlemen, please take your seats. The show is about to begin.

Regards...jmcc

[EditorialGuy]

Well that clears it up. Just a bit of entertainment, is it?

The political term is "optics."

[jmccormac]

The political term is "optics."

If only they had you to advise them? Google had to pay a US$500 million fine for drug dealing. Google had to pay Sterling £130 million to the UK tax authorities in a settlement for having underpaid taxes. Google is about to be hit with a fine of 3,600 million Euro by the European Commission. The British are probably going to reexamine the £130 million settlement in light of the French action. The French investigation into Google's possible tax fraud has been ongoing for almost a year and this raid is part of it. This isn't just "optics". A raid of this magnitude is out of the ordinary because of the number of people involved and specifically the number of IT specialists involved. Now you and other Google supporters might want to dismiss this as being just "optics" but the reality is that Google's tax avoidance has made it the subject of investigation by tax authorities in some of the jurisdictions in which it operates. It has been reducing its corporation tax bill by offshoring its revenue so that it avoids paying the normal corporation tax rates in many of the countries in which it operates. (This is a central element of the French investigation.) What you think and claim about the French investigation of Google is irrelevant. The only thing that matters is what happens next. The French may get enough evidence from this raid and the year long investigation to make Google pay more in taxes than it has paid already or it may not. A more clueful political observation would be that Google has been refusing to settle and now this investigation has moved to a different level.

The tax authorities in other EU jurisdictions, and the US, will be watching events closely. The tax authorities do not seem to share your belief that Google can do no wrong. Google has been investigated and has had to pay a fine of $500 million for drug dealing in the US and a tax settlement of Sterling £130 million in the UK. It is facing a Euro 3,600 million fine from the European Commission. Feel free to defend them but the reality is that it is not going to have any impact on the outcome of the French investigation or what the European Commission does next. And the FTC and IRS may also be interested in how things turn out in the France.

Regards...jmcc

[ChanandlerBong]

Can't wait for my next tax return when I'll tell HMRC that I too would like to pay 3% tax.

I'll update the thread...
:o)

[Shepherd]

Google had to pay a US$500 million fine for drug dealing

That sure is some fun hyperbole. Of course there is a fine line between hyperbole and defamation.

[jmccormac]

Like these:

Feds say senior Google execs knew about illicit pharma ads
[arstechnica.com...]

Google pays $500 million to settle DOJ case over illegal drug ads
[money.cnn.com...]

Google Settles Probe Into Illegal Online Drug Ads for $500M
[pcmag.com...]

FDA: August 24, 2011: Google Forfeits $500 Million Generated by Online Ads and Prescription Drug Sales by Canadian Online Pharmacies
"Internet search engine accepted advertisements from online Canadian pharmacies that targeted U.S. consumers and illegally imported controlled and non-controlled prescription drugs into the United States"
[fda.gov...]

Google was promoting this activity and profiting from it. Perhaps this quote says it best:
"This investigation is about the patently unsafe, unlawful, importation of prescription drugs by Canadian on-line pharmacies, with Google's knowledge and assistance, into the United States, directly to U.S. consumers," said Peter F. Neronha, United States Attorney for the District of Rhode Island."

Regards...jmcc