Spanish authorities raid Google over possible tax evasion, fraud
Thu 30 Jun 2016
Members of the Spanish tax office have raided Google’s Spanish headquarters at the Picasso Tower in Madrid, whilst conducting investigations into possible tax evasion/fraud regarding Google’s VAT payments and its tax submissions as a non-residential entity in the country.
According to El Mundo (Spanish language), Google, whose European operation is retains its headquarters in Dublin and which is now part of parent company Alphabet, could be failing to declare all due earnings from its Spanish operation.
Google is reported to have stated that it is cooperating fully with the Spanish authorities, and a spokeswoman confirmed to Reuters that the company complies with all fiscal legislation in Spain, as in every territory in which it operates.
The raid follows a similar one by French authorities on Google’s Paris base a month ago in response to allegations of tax evading practices in French territory.
The Spanish raid adds extra momentum to a public and governmental will over the last year to revise the extreme international flexibility which lets major multi-national tech concerns such as Google and Apple reap great financial reward in global territories while contributing what are perceived to be a risible minimum back into the economies they are thriving in.
In February Alphabet settled a decade-long tax dispute in the United Kingdom by agreeing to pay $185 million in settlement of estimated UK taxes over that period. For half of the period covered in that case, Google had paid only $16 million in corporation taxes over earnings of more than $18 billion.
At that time Matt Brittin, the President of EMEA Business and Operations for Google, stated – perhaps not unreasonably – that international tax laws might be in need of simplification, observing “We find ourselves in the position where we are paying the tax that the tax authorities told us to pay.”
It could be argued that the powers which allowed the current level of flexibility over international tax did not anticipate the huge figures which have caused the growing controversy, nor the background of seven years of economic struggle which have brought these practices into sharp relief.