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Australian Govt Pledges Action On Google Tax Evasion
daria42 writes "Looks like Google's habit of funneling billions of dollars in revenue through its Irish and Bermuda subsidiaries continues to attract unfavorable government attention globally. France has already announced plans to take on the search giant's tax evasion habits, and the Australian Government, to which Google paid just $74,000 in tax last year despite having Australian revenues close to $1 billion, has now confirmed plans to do the same."
No they haven't been charged with tax evasion. However, as the Australian Taxation Office has seen claims of AU$1b in payments including GST to Google through the quarterly business activity statements that every registered business has to make, there is a very large discrepancy in how much Google are paying taxwise and how much they are earning in Australia.
Well, the thing is - you can easily put your earnings in any country you want. For example, here's what Apple does for Spain: Apple Ireland sells (all) devices to Apple Spain (however its legal form is) pretty much at the same price the devices are sold to consumers. Therefore Apple Spain makes no profit - in fact it can easily be at a loss they since have to pay to employees, leases and so on. All the profit is legally produced in Ireland where the taxes are a lot lower.
Problem here is that the European Union doesn't really want to fix it. If they wanted to, the problem would be solved rather quickly.
Ireland (and a few others) are just parasite states - their tax system is based on 'let's have foreign companies here by lowering their taxes a lot' even if they just means they're fucking the European partners which whom they share a market and a lot of other things. The day there's an unified tax law over Europe these problems will cease to exist.
Quite right.
Where there is an flaw in tax law, it will eventually be written out and that loophole closed. Google has avoided tax thus far but now is the time to pay up and for that to occur the law needs to be changed.
Of course, Google isn't the only entity using such tactics - it is the extent of the avoidance that is causing uproar. Every multinational company will have similar tax plans in place (or their accountants atrn't doing their jobs properly) and they will all be concerned about any tax developments.
Remember, it's not a Google Tax people want, it is a prevention of tax avoidance which might affect the decision of of large companies to move into or out of the countries where they have a physical presence. Catastrophic financial consequences may well occur.
Revision of tax law is not the work of a moment...