Spanish authorities raided Google’s office in Madrid as part of an ongoing tax probe. Google has been at the centre of several tax investigations across Europe as officials begin to look into whether the company is meeting its tax obligations.
Google generally pays little tax in continental Europe thanks to a legal loophole that allows it to pay tax in the Republic of Ireland. While this is common practice among many companies, European officials have begun clamping down on those it suspects to be avoiding taxes – however legal the methods may be.
Google has said in a statement that it complies with fiscal legislation in Spain just as it did in all countries where it operated. The company is also working with authorities to answer all questions.
French officials had earlier raided Google’s Paris headquarters on allegations of unpaid taxes. Google is said to owe the French government some €1.6 billion, despite using the same legal loopholes to move profits to a location with a more favourable tax system.
The company ran into similar problems in the UK, although it managed to negotiate a deal that would see it pay £130 million in back taxes. The rest of Europe has not been happy with how Downing Street handled the situation, and it doesn’t look like French or Spanish tax authorities are going to be so generous.