GOOGLE, AND THREE companies affiliated to it, are being investigated for alleged tax fraud in China, a Chinese newspaper has claimed.

The Economic Times cited sources within China’s tax authorities, who said the search giant was being investigated for tax evasion, while the other three companies were accused of accounting and tax irregularities.

A Google spokeswoman later confirmed that the Californian-based company owned the three affiliates.

The spokeswoman denied the claims, however, saying Google believed it was, “and always have been, in full compliance with Chinese tax law.”

The investigations relate to the production of fake receipts as well as citing unrelated spending – such as expenditure on massages – as a business expense, thereby reducing the companies’ tax bills.

Neither the Chinese foreign ministry or national tax authority would comment on the case.

Google has been previously accused of choosing countries in which to set up, including Ireland, on the basis of the tax burden it would be liable to in relative jurisdictions.

Two other Google-affiliated companies were accused of similar measures in 2009.