Google's tax liabilities scrutinized after Spanish raid
Spain has joined the scrum of tax authorities examining Google's accounts to see if the company has paid all that it should.
A team of 35 inspectors from Agencia Tributaria, the Spanish tax authority, raided Google offices on two sites in Madrid on Thursday, according to Spanish newspaper El País. The authority requested court approval for the raid on Tuesday, the report said.
They were investigating the tax liabilities of Google's subsidiaries in Spain and Ireland, through which the company channels much of its European revenue.
It's a relatively common business practice to locate profit-generating activities in jurisdictions with low rates of corporation tax, and keep loss-making functions where taxes are higher. Directing profit to low-tax jurisdictions in this way is not necessarily illegal, if the transfer can be justified.
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