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French Police Raid Google’s Paris Offices in Tax Evasion Case

Members of the media stand outside the entrance of Google's Paris headquarters as French investigators conduct a raid May 24, 2016 as part of a probe over tax payments, a source close to France's Finance Ministry told Reuters.

A tax fraud investigation prompted French police to raid Google’s Paris offices on Tuesday.

"These searches are the result of a preliminary investigation opened on June 16, 2015 relative to aggravated tax fraud and organized money laundering following a complaint from French fiscal authorities," the prosecutor's office said in a statement.

The French daily Le Parisien reported that about 100 investigators participated in the early morning raid. Authorities believe the tech company owes $1.7 billion in back taxes.

Google issued a statement saying it complies with French law and is cooperating fully with authorities to answer their questions.

"The investigation is aimed at finding out whether Google Ireland Ltd. is permanently established in France and if, by not declaring some of its activity on French soil, it has failed to meet its fiscal obligations, in particular with regard to corporation tax and value added tax," prosecutors said.Google has based its regional headquarters in Dublin, Ireland.

The tech giant and other multinational companies have faced criticism for basing their European subsidiaries in low-tax jurisdictions such as Ireland and Luxembourg, which allows them to do business with minimum fiscal obligations — a practice known as profit-shifting.

European lawmakers have continually pressured companies to meet their tax obligations in the countries where they do business.

In January, Google agreed to pay nearly $190 million in back taxes to Britain.

The raid on Google's Paris offices marks the second such action in five years. Google's offices in the French capital were raided in June 2011 in a tax investigation.