Google New Zealand has posted a loss for last year.
Photo: Flicker / Robert Scoble
The company has released its annual report, which showed it lost about $600,000 in 2015.
In the previous year, it returned a small profit of $160,000.
The directors' report said that was because of Project Loon, Google's New Zealand-based pilot programme that used balloons in the stratosphere to improve broadband.
It said this year's result was more in line with Google New Zealand's normal financial performance.
Project Loon was first launched in 2013, with the intention of providing internet access to rural areas.
The company had said its ultimate goal was to have a ring of balloons circling the earth, ensuring no part of the globe could not access the internet.
One of the balloons crashed in 2014, prompting a response from emergency services after it was thought to be a light plane.
Google's parent company Alphabet Inc pays little tax in most European countries because it reports almost all sales in Ireland.
French authorities raided several multinational companies' headquarters this year, including Google's, in tax probes.
The New Zealand government has previously been criticised as being a 'soft touch' on tax avoidance, but it recently signed an international agreement on the issue.
From September 2018, New Zealand will share information with other tax jurisdictions that are signatories to the agreement.