French investigators have raided Google’s Paris headquarters – saying the company is now under investigation for aggravated financial fraud and organised money laundering.
In a major escalation of France’s long-running enquiry into Google’s tax affairs – magistrates revealed on Tuesday that the software giant is suspected of evading taxes by failing to declare the full extent of its activities in the country.
Prosecutors said they want to establish whether the Irish company through which Google funnels the majority of its European revenues does in fact control a ‘permanent establishment’ in France.
Google maintains that its large offices in Paris London and other European capitals are not fully fledged businesses but operate as mere satellites of its international headquarters in Dublin – providing back-office services such as marketing.
The company routes most of its non-US revenue from activities such as advertising through Dublin – where the 12.5% corporation tax rate is low by European standards.
The structure allows the company to avoid both European and US taxes on the income.
Google released a statement saying: ‘We comply with French law and are cooperating fully with the authorities to answer their questions’.
Nearly a week after the killings – business-as-usual is the banner flying over Paris.
The return to normal with its flavour of defiance can be observed in action anywhere from Châtelet as far as the city gates.
Dangerous assumptions keep coming back to haunt large cities in France – most of them with two parts – an older and a newer – that fail to constitute a whole.
The arrangement parodies the former colonial towns of Africa with their well-kept ‘nouvelles villes’ for settlers and the administration and their old ‘authentic’ areas for the colonised.
In metropolitan France the administration has always belonged in graceful historic city centres while the new parts – the banlieues – with settler influxes from the former colonies struggle on the margins against soul-destroying forms of ‘authenticity’: endemic youth unemployment – substandard housing – extremist faith groups – higher-than-average crime rates.
Source: The New Normal « LRB blog
But even if ISIS is destroyed – its message could still captivate many in coming generations.
The shock produced by the multiple coordinated attacks in Paris on Friday—the scenes of indiscriminate bloodshed and terror on the streets, the outrage against Islamic extremism among the public – French President Francois Holland’s vow to be ‘merciless’ in the fight against the ‘barbarians of the Islamic State’—is, unfortunately precisely what ISIS intended.
For the greater the hostility toward Muslims in Europe and the deeper the West becomes involved in military action in the Middle East – the closer ISIS comes to its goal of creating and managing chaos.
This is a strategy that has enabled it to confound far superior international forces while enhancing its legitimacy in the eyes of its followers.
The complexity of the French plot also suggests how successful ISIS has been at cultivating sources of support within the native populations of secular Western countries.
Attacking ISIS in Syria will not contain this global movement – which now includes more than two thousand French citizens.
The Charlie Hebdo attack accentuated a longer-term decline in trade for the French capital’s high-end accommodation sector.
Rather than yield to the ambient gloom – the most recent of Paris’s luxury hotels – the Peninsula – chose to crack open the bubbly and forget about the crisis. Having opened last August on Avenue Kléber – the management held an official launch party in April. Two thousand happy people – including the chain’s top customers and celebrities such as actors Zhang Ziyi and Michelle Yeoh – gathered – savouring champagne – canapes – and buckets of caviar.
But this beano was no more than a ray of sunshine in a very cloudy sky. Luxury hotels in the French capital have been having a hard time since the new year. Clement Kwok – CEO of Hongkong and Shanghai Hotels – which owns the Peninsula group – acknowledged this quite openly: ‘In January February and March 2015 the market was weak’ he said during a brief visit to Paris. Nor is he alone. Didier Le Calvez – general manager of Le Bristol – puts it rather more bluntly: ‘The first quarter was catastrophic’.
This is partly the fault of the terror attacks in early January – which scared off much of the luxury hotels’ custom – in particular foreign visitors – who make up 80% to 90% of their clientele. Above all it affected ‘the two core targets for luxury hotels: visitors from the United States and the Middle East’ says Gwenola Donet – head of the hotels and hospitality department for France – at Jones Long Lasalle – a specialist in luxury property. The tension sparked by the Charlie Hebdo attack also discouraged Asian and South American visitors.