Tax authorities in Spain have raided Google’s offices in Madrid as part of an investigation into tax evasion and fraud, TechCrunch understands. Local press and the Reuters news agency are also reporting the raids.
The raid on Google’s Madrid headquarters and its Google Campus workspace are related to VAT payments and non-residence tax, according to Spanish press. The company is suspected of not declaring part of its business activity performed in Spanish territory and therefore of failing its local tax obligations.
A Google spokesperson declined to answer specific questions about the raid, but did provide the following statement: “We comply with the tax law in Spain, as in every other country in which we operate. We are cooperating fully with the authorities in Madrid to answer their questions, as always.”
The Spanish raid follows a similar swoop last month when French authorities raided Google premises in Paris as part of an ongoing probe into tax noncompliance. That raid had been planned in secret for nearly a year, and Google may be facing a $1.8 billion fine (€1.6BN) in France.
Like many US tech giants that do business in Europe Google is headquartered in Ireland — which has a favorable corporate tax rate.
However public and political criticism of businesses deliberately structuring themselves to minimize local tax liabilities has been growing in recent years — putting more pressure on tax authorities to act.
In January Google agreed to pay £130 million in back taxes to UK authorities to cover a decade of underpayment, although outside the government that agreed it that settlement was criticized as a ‘sweetheart deal’ that did not represent good value for the British taxpayer.