TechCrunch reports that the raids on the search giant's Madrid HQ and Google Campus are related to "VAT payments and non-residence tax." Google, however, is adamant it has done nothing wrong and issued the following statement: "We comply with Spanish tax laws just as we do in all countries where we operate. We are co-operating with the authorities in Spain in order to answer all their questions, as always."
Google's European tax practices have come under fire because the company reports the majority of its sales in Ireland, allowing it to enjoy a lower tax rate thanks to loopholes in international tax laws. In January, it announced it would pay the UK government £130 million (around $185 million) in back taxes, but French Finance Minister Michel Sapin has already ruled out a similar deal over the €1.6 billion in back taxes (roughly $1.76 billion) the company reportedly owes.