The French Ministry of Finance is investigating Microsoft’s French arm for tax evasion, after a fiscal audit late last month revealed suspicious transactions.
Microsoft has been accused of deliberately attempting to avoid France's 33 percent corporate tax, via billing services conducted through offshore companies, reports AFP.
The ministry and local police force conducted a raid of Microsoft’s French offices late last week, in what Microsoft called a “routine check”.
The company has denied any wrongdoing.
"We work within the tax laws," it said in a statement. "We firmly reject any allegation or label of fraud and there is no proof to back that up."
The investigation began just over a year ago, when Microsoft subsidiaries in the US and Ireland allegedly put in invoices for advertising and commercial services purporting to have been performed by the French operation, reported Le Canard Enchaine.