French and German politicians to pressure Google on Irish tax arrangements
09 May 2013
Posted by: Author: Tom Bergin and Natalie Huet
Source: Tom Bergin and Natalie Huet (Irish Independent)
POLITICIANS in Germany and France say they will press for Google Inc to be quizzed on corporate income tax after a Reuters report highlighted how the company employs sales staff in the UK while telling the tax authorities that sales are made from Ireland.
The report showed the company advertised for "sales" staff to "negotiate" and "close" deals, although a Google executive had told parliament its London-based employees did not sell to UK clients. British lawmakers plan to call Google to testify again to a parliamentary committee to clarify what work it does in Britain.
Currently Google has no taxable presence in France, Germany or Britain in relation to its advertising business, from which it makes almost all its profit, allowing the company to operate almost tax-free in these countries. Whether staff in a country sell could have a big impact on its tax bill, tax lawyers and academics say.
Like Google UK, Google designates its French and German units as providers of marketing and support services to Google Ireland, which pays most of its turnover to an affiliate in Bermuda; and gives the subsidiaries enough to cover their costs and generate a small taxable profit.
In April, Google advertised dozens of French and German-based positions in job categories that fall within the area it describes as "selling". It has now changed many adverts, but several staff based in France and Germany still say on networking website LinkedIn that they fulfil sales roles.
In 2011, French tax authorities raided Google in an investigation of whether its Paris office does sales work, and the country has asked the company for 1.7 billion euros ($2.2 billion) in back taxes. In Germany, where one advert told candidates for "Enterprise Account Manager (Munich)" that they would "seal the deal and help make the world a more Googley place", one lawmaker said he would call for an investigation.