China accuses Google-linked companies of breaking tax laws

TENSIONS ARE MOUNTING between China and Google after authorities accused Google-linked companies of breaking Chinese tax laws.

The allegations reported by Reuters were published in the Economic Daily, a state-run Chinese newspaper. It suggested that three "Google enterprises in China" had run afoul of the tax man, investigated and then subsequently punished.

The companies reportedly claimed relief for things they shouldn't have, which meant they didn't have to pay as much tax. The figure mentioned is in the region of $6 million. They are also under further investigation for tax avoidance.

The reports are not clear if these are Google-owned companies, subsidiaries, partners, or business clients, but one of them goes by the name Google Information Technology (China) Company Ltd, suggesting it might be a subsidiary.

The relationship between Google and China has been extremely strained over the past year after Google accused the Chinese government of aiding hackers in attacks on the Gmail accounts of human rights activists. It threatened to pull out of the country if China did not uncensor its search results. Tensions could rise even further over a mapping licence, which Google needs to apply for by today. µ