Google Spain makes profits after three years of losses

MADRID – The Spanish branch of Google is finally in the black, after three years of red numbers. The USA company has set aside €1.75 million for corporate taxes, so net profits are €4mm. It’s not that the Spanish market is unprofitable – quite the contrary, as we report below – but their accounting practices, in common with other national branches by billing in Europe through Ireland, where the taxes are considerably lower than elsewhere on the continent. Those losses, then, were covered by the profits of other branches, so no great headache for one of the world’s largest businesses (and getting bigger). The practice is recognised as perfectly legal by the Spanish tax authorities, after an inspection Google re-billed its costs in 2013, giving itself a larger margin – something that was done in many other countries after widespread complaints that it wasn’t paying its way. So Google Spain is now in profit and paying something pretty modest in taxes.

Google Spain registered €52.7mm in sales, 25% more than during fiscal year 2012. This income comes from other companies in the group: Google Ireland (€49.3mm) and the headquarters, Google Inc. (€2.8mm).

The accounts were approved at the company’s HQ in Mountain View, California and registered in Spain at the Registro Mercantil (company registry) last Friday.