The investigation began just over a year ago, according to Le Canard Enchainé, when tax inspectors visiting a French gaming company discovered invoices from Irish and U.S. subsidiaries of Microsoft for advertising and commercial services allegedly performed in France by employees of French subsidiaries.

Microsoft is not alone among IT companies in facing such allegations. Google France received a visit from tax inspectors a little over a year ago, and the company is now working with the authorities to answer their questions, a spokeswoman said Wednesday. In March, French media reported that Google France could face a value-added tax bill of up to €100 million (US$125 million) for services allegedly billed through its Irish subsidiary but performed by its French subsidiary.

Such maneuvers allow service providers to avoid French corporation tax of 33.33 percent, paying instead the Irish corporation tax rate of just 12.5 percent, or even lower rates in some U.S. states.

The tax raid is not the only thing to have disturbed the peace at Microsoft's French subsidiary in the last week.

Early on Monday, it announced its first ever lay-offs: It will cut 30 posts in its advertising and online divisions. The company's advertising activities took a bigger hit Monday, when Microsoft announced that it would reduce the book value of its online services division by $6.2 billion, due largely to the poor performance of aQuantive, an online advertising company it acquired for $6.3 billion in 2007.