14 DAY TRIAL // After French police had done the same thing in May, Spanish tax authorities raided Google's headquarters last week looking to collect evidence regarding a possible tax evasion by the search giant, the media reports.
The raid took place on Thursday morning, on June 30, at Google's "Madrid Campus," as the local headquarters are called.
Authorities started an investigation related to Google's unpaid VAT (Value-Added Tax) and taxes for non-residents.
Initially, Google employees denied tax authorities entry to the building, but not for long. The inspection lasted until 18:30 in the evening.
A Google spokesperson told media after the tax authority investigation that the company would comply with local tax legislation and would cooperate with Spain's tax authorities.
EU countries are coming down on Google
At the end of May, French authorities raided Google's Paris headquarters in an investigation related to a case where the country's tax agency said that Google owed €1.6 billion ($1.8 billion) in back taxes.
Earlier in the year, Google settled with UK authorities after they also accused the company of dodging taxes for the past years. Google agreed to pay £130 million (€172 million / $191 million) in back taxes for the last ten years. French authorities were not willing to reach a similar settlement.
All three countries investigated Google for the same thing. Just like many other multinationals, Google is shifting profits to its Ireland-based HQ because Ireland has the lowest corporate taxes in Europe.
This way, Google and many other companies are avoiding paying taxes on the profits they make in the EU's other countries.
Legally speaking, international law allows Google to sign all sales contracts via its Google Ireland division. The French investigation was set out to determine if Google's Paris HQ is used as a permanent presence inside the country's borders through which these contracts are negotiated and then passed on to another HQ for signing.