Google's Madrid Offices Searched -- WSJ
July 01 2016 - 3:03AM
Dow Jones News
Spanish tax case is latest sign that European officials are
ratcheting up pressure on tech firms
By Matt Moffett and Sam Schechner
MADRID -- Spanish tax inspectors searched the offices of Google
here, the latest in a series of tax investigations throughout
Europe targeting the search firm.
Inspectors swept into the company's headquarters in an office
tower, as well as a campus it maintains in the Spanish capital,
people familiar with the case said.
Investigators were looking for "possible evidence of taxation in
Spain that is less than what is appropriate given [Google's] real
activity in the country," a source involved in the investigation
said.
The Spanish newspaper El Mundo reported Thursday the probe
involved the possible evasion of the value-added tax and other
levies.
"We comply with the tax law in Spain, as in every other country
in which we operate," Google said in a statement. "We are
cooperating fully with the authorities in Madrid to answer their
questions, as always."
A Google spokeswoman added that the Spanish case was an
administrative matter, not a criminal one.
The investigation in Spain follows a raid in May on Google's
headquarters in Paris by French tax investigators. That escalated a
tax dispute in which French authorities have sought more than EUR1
billion ($1.12 billion) from the company.
In May, a Google spokesman said the company was cooperating with
French authorities. "We comply fully with French law," he said.
The Spanish case is the latest sign that European authorities
are ratcheting up the pressure in long-festering disputes with
Google and other tech companies.
Speaking at a conference Thursday in Paris, Eric Schmidt,
executive chairman of Google parent Alphabet Inc., said that "I
understand the anger and the frustration" at the level of taxes
paid by multinational firms. But he added that Alphabet is "part of
a global tax regime that all companies fit into" and "we fully
comply with the law."
The French case is among the biggest in a series in which tax
authorities are seeking similar back taxes and tax-evasion fines
against Google and other companies. Italy, which reached a tax
settlement with Apple Inc. late last year, is also pursuing Google
for around EUR300 million in back taxes.
In January, a Google spokesman said that the company complies
with the tax laws in every country where it operates and that it
continues to work with Italy's authorities.
The European Union's executive arm has also been investigating
alleged sweetheart tax deals enjoyed by Amazon.com Inc. and Apple.,
cases that could lead to orders to repay years of back taxes. Both
companies deny receiving any special treatment.
The threat of legal action -- coupled with new tax rules
proposed by the Organization for Economic Cooperation and
Development, and a new "diverted profits tax" in the U.K. -- has
also raised pressure on companies to change their tax
structures.
Write to Matt Moffett at matthew.moffett@wsj.com and Sam
Schechner at sam.schechner@wsj.com
(END) Dow Jones Newswires
July 01, 2016 02:48 ET (06:48 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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