In response to some Chinese media reports that Google (GOOG) China has been involved in tax evasion and is being investigated by the Beijing Municipal Local Taxation Department, a spokesperson from Google China has clarified that they have never received a notice from BMLTD on the investigation and the rumormongers may have ulterior motives.

According to news reports on, Google reportedly began to provide Chinese language search services in China as early as 2000 and launched its Chinese keyword search in 2003, but the company did not record any of its business transactions in China until it set up a branch in China in 2006. According to China's policies mentioned in the article, once a foreign company begins business in China, it is reportedly obligated to pay the taxes for the previous five years. So the report estimates that Google might have evaded over CNY100 million in taxes in China in the five years before 2006, based on its gross income of CNY285 million in 2006.

Google China's spokesperson says it is an incorrect rumor concocted in the media. The spokesperson says that the Google has been abiding by Chinese laws and regulations since it first set its foot in the country, so this rumor is groundless,

Google China says it will continue to keep an eye on the issue and may take legal measures to protect its due interests.


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