Italian coppers launched a new probe into Google Italy this week after early findings suggested the search engine failed to declare income and still owed sales tax.

An economy ministry document showed that an earlier probe, which was launched by Italian financial police in 2007, found that Google had developed a system to transfer profits from its Italian operations to Ireland so it could benefit from a more favourable tax rate. Investigations between 2002-2006 found that Google had failed to declare at least $310 million of income to authorities and owed more than 96 million euros in sales tax.

Italy is short of a bob or two at the moment and can't let that sort of money be lost. Police have also been assessing the practices of other multinational online businesses who are managing to shift profits made in Italy into countries where they can pay less tax.

It said police had launched a new probe on Monday to check the company was meeting its fiscal obligations in Italy. Google insists that it complies with tax law in every country in which it operates.