The search was continuing on Tuesday lunchtime at Google's offices in the French capital as part of a tax fraud investigation, local media reported.

"A raid is underway," the source at the French finance ministry said, confirming a report in French daily Le Parisien.

The raid, at an office block in the Paris suburb of Bercy, began at 5am local time (03:00 UTC).

French authorities believe the tech giant owes 1.6 billion euros ($1.7 billion) in back taxes, according to a source close to the matter.

Controversy has been building over the tax arrangements of several multi-national corporations, which operate in several European countries, but pay the majority of their taxes in just one EU state - often Ireland or Luxembourg.

Firms under spotlight

Google's European operations are headquartered in the Irish capital, Dublin, which offers some of the lowest corporate tax rates in the region.

Google France received a "notification" of the investigation back in March 2014, which did not give any precise figures.

It has been raided by French authorities before, in June 2011, during an investigation into transfers to its Irish headquarters.

In January, Google agreed to pay 130 million pounds (169 million euros) in back taxes to Britain,#prompting criticism that tax authorities had been too lax in chasing the search giant. The European Commission was due to probe whether the deal was fair.

A spokesman for the tech giant was not immediately available for comment on Tuesday's raid.

mm/jm (AFP, Reuters)