France says it will ‘go all the way’ after Google tax raid

France will "go all the way" to ensure that multinationals operating on its soil pay their taxes, French finance minister Michel Sapin has said.

Mr Sapin also said more cases could follow after Google and McDonald's were targeted by tax raids.

Mr Sapin, speaking in an interview with Reuters and three European newspapers, ruled out negotiating any deal with Google on back taxes, as Britain did in January.

Dozens of French police raided Google’s Paris headquarters last Tuesday, escalating an investigation of suspected tax evasion.

Investigators searched McDonald’s French headquarters on May 18th in another tax investigation.

“We’ll go all the way. There could be other cases,” Mr Sapin said.

Raids this month by French police and justice investigators build on the work started by tax authorities three or four years ago, when they transferred tax data to judicial authorities to look into any possible criminal angle, Mr Sapin said.

However, it appears that the Google inquiry will take time. Analysis of data seized by investigators in last week’s raid could possibly take years, French financial prosecutor Éliane Houlette said yesterday.

Google, McDonald's and other multinational firms such as Starbucks are under increasing pressure in Europe from public opinion and governments, who are angry at the way businesses exploit their presence around the world to minimise the tax they pay.

Fully complying

Google says it is fully complying with French law and McDonald’s declined to comment on the search, referring instead to past comments that it is proud to be one of the biggest taxpayers in France.

Mr Sapin said he could not discuss what sums were at stake because of the confidentiality of tax matters.

A source in his ministry had said in February that French tax authorities were seeking some €1.6 billion in back taxes from Google.

That inquiry relates to money routed through Google’s European headquarters in Dublin.

Google, now part of Alphabet Inc, pays little tax in most European countries because it reports almost all of its sales in Ireland.

This is possible thanks to a loophole in international tax law, but it hinges on staff in Dublin concluding all sales contracts. – (Reuters)