According to Shanghai Securities Paper, the Beijing Taxation Department has begun an investigation on Dr. Kai-Fu Lee, president of Google (GOOG) Greater China, who has been suspected of evading more than CNY5 million in tax payments over the past two years.

At the end of 2005, Lee resigned from Microsoft and went to join Google, which is said to have offered him a much higher salary. Lee himself, according to public information, is an American Chinese. China's relevant rules show that expatriates need to pay tax after they work in the country for three months. Based on his income in the past two years, Lee should have paid CNY5 million to the tax department.

Beijing Taxation Department has confirmed that they are investigating Lee, but they say that they won't disclose any further information for sake of disclosing personal information about a tax payer and will soon provide a detailed reply to the person who reported about Lee's tax evasion. It is still unclear who reported Lee to the authorities.

Google China has told local Chinese media that it has not received notice from Beijing Taxation Department on the investigation on Lee.