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Google office searched by French investigators

Last updated: 11:44 24 May 2016 EDT, First published: 06:44 24 May 2016 EDT

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Google is back in the spotlight - this time French tax affairs

The Paris office of search engine giant Google (NASDAQ:GOOGL) has been raided by French investigators, according to reports.

The raid began at 5am and the firm is now reportedly under investigation for aggravated financial fraud and organised money laundering,

The latest represents a decisive escalation of the country's probe into the affairs of the powerful global firm.

In January this year Google agreed to pay the UK government £130mln as a settlement in tax for the period between January 2005 and June 2015.

But that sum was declared "derisory" by some critics.

Then, the French finance minister Michel Sapin ruled out striking a deal with the US group, saying the sums at stake in France were “far greater” than in the UK.

France is seeking an eye-watering €1.6bn (£1.3bn) in back taxes from Google, a finance ministry source reportedly said in February.

French magistrates said the software giant is suspected of evading taxes by failing to declare the full extent of its activities in France.

Google routes most of its non-US revenue from activities such as advertising via Dublin, where there is low corporation tax.

Google says its large offices in European capitals operate as satellites of its international headquarters in Dublin, providing back office services like marketing.

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