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Google Ordered Back To UK Parliament To "Explain Itself" Following Investigation
DavidGilbert99 writes "Last November Matt Brittin, Google's European chief gave a pretty convincing account of himself as he tried to explain why Google wasn't paying more tax in the UK. All the sales staff were based in Ireland apparently and the UK-based staff were there just to promote the platform for advertisers. Great. Nothing to see here. Move on please. Well, actually there is a little more to the story, as an investigation by Reuters has discovered. There are many sales staff in the UK with titles and responsibilities curiously close to what most people would call sales staff and as a result Mr. Brittin will once again have to face Margaret Hodge and the PAC to explain just what is happening."
I wonder if Reuters did use google to find it out.
I did a couple of interviews for Google in Ireland, yet all my interviewing was through the UK... 0.o
Why does this guy get to explain himself? In my country, the IRS just sends me a letter about me misbehaving, and says I've got 30 days to pony up the cash.
Why the flying duck does a company then gets to make apologies, when it's obvious by now that they're cheating?
8 of 13 people found this answer helpful. Did you?
Corporation Tax is, of course, only levied on the profits disclosed by the company's annual return. So only profitable companies have to pay 23% of their net as tax.
But this encourages the Big Boys to simply shift their profit to other, overseas, divisions, through 'franchise payments' and other mechanisms.
Perhaps it's time to say that any company making over 1 million in annual revenue will pay, say, 5% on its revenue above that level. No discussion of profits. It is much easier to determine how much money a company took-in. What money landed in its UK bank accounts is what is taxed.
Suppose instead a company was liable for corporation tax based on the *portion* of its revenue that comes from the country. So if UK is 8% of revenue for Google, Microsoft or whatever, then they asses that 8% of their revenue as liable for corporation tax in the UK.
How to tell the difference?
Activity A is subject to tax.
You can avoid paying the tax by not doing activity A
If you do activity A and perform other acts solely to get around paying the tax, that is evasion.
Simple.
Pay No Taxes
Why is Snark Required?
We have a tax like that already - VAT
VAT does not work like that. VAT is paid by the Final Customer, The businesses in between don't pay. What you may be getting confused over is the HMRC *collect* the net of incoming VAT and outgoing VAT until it is finally paid in full by the final customer. Businesses essentially pay nothing.
There is a nice explanation and example at wikipedia http://en.wikipedia.org/wiki/Value_added_tax
http://businessetc.thejournal.ie/explainer-irish-corporation-tax-715761-Dec2012/
"Google bribe the right people at HMRC"
If you looked at the career history of those at the top of HMRC you would see that there is no need for bribery.
Actually the family business is the steel-trading company Stemcor of which she owns about £15m worth of shares via a trust fund in the names of her children and other family members in order to avoid paying tax.
You probably also suffer from an unfortunate tendency to view markets with blinders and therefore see large players dominating various fields at any given snapshot in time as a bad thing, but without the ability to see that such domination is still better than the alternative of unskilled bureaucratic control that is necessarily comprised of similarly flawed human beings with no real accountability to speak of in the same examined period.
By living in a democratic country you have a guaranteed slice of control on the government and therefore there is some accountability. With private entities, the accountability is only to the shareholders, which exclude most of the masses. That's in the best of cases, with a privately owned company, you don't even have access to that.
The only difference at this stage is market pressure which address the "unskilled" bit of your rant. That should allow you to get a better service in theory. Of course there is the drawback that you need unskilled bureaucratic control to make sure the market is fair.
TLDR: You make a very weak attempt at justifying the personal insult against GP in your second paragraph and trick slashdot moderators to mod you up.
VAT is paid by the Final Customer, ... at the point of purchase, which in Amazon's case is an offshore subsidiary with lower tax. So basically they get to sell goods nearly tax free to UK residents where as local retailers have to pay full tax.
That is nothing to do with Amazon. In the UK books rightfully are vat free, but ebooks aren't. That is just wrong. The fact that throughout the EU ebooks are inconsistent...and Amazon take advantage of the fact is just an aside.
James Bridle "Ebooks are not exempt from VAT, being classed as, I believe, ‘electronic guides’ rather than ‘books’"
There are probably plenty of other ideas, but what we have certainly doesn't work properly for the 'people'.
On y va, qui mal y pense!
Most bad government has grown out of too much government. - Thomas Jefferson
Whenever I see a quote like that attributed to Thomas Jefferson, I always [use a popular internet search tool] to find more often than not that it's simple right wing fantasy. Why am I not surprised, that it's fake?.
Here are some more things to chew on:
The force that blew the Big Bang continues to accelerate.
"Google bribe the right people at HMRC"
If you looked at the career history of those at the top of HMRC you would see that there is no need for bribery.
IIRC, Vodafone escaped a huge tax bill by taking one of the HMRC top dogs to dinner. Once.
Not quite 'Minimum Bribe Level: 1 Turnip', but not far off.
No colour or religion ever stopped the bullet from a gun
Google on the other hand IS KNOWN to use tax avoidance
Apple on the other hand IS KNOWN to use tax avoidance, and we KNOW they made huge profits on which they paid very little tax, cheating people in countries all over the world.
Here is a quote from the Guardian "Apple is estimated to have avoided more than £550m in tax in Britain in 2011. Its latest accounts show UK turnover at just over £1bn and profit at £81.3m, generating a tax bill of £14.4m." http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/9829894/Apple-shelters-almost-1bn-a-week-from-US-tax-man.html
I believe your favourite mega corporation right now famously borrowing money specifically to avoid paying tax :) iBonds I believe they are calling them.
Yeah you don't work for google *eye roll*
Sure glad I got the constitution to protect me from people like you :-)
Thanks for the info on the quote. It's pretty clear he believed exactly what the quote says, but I'd rather not quote something that's inaccurate. Also, in the very link you provided it says the quote first arose in 1913, long before the republican party or conservatives (neither of which I belong to) were what they are today.
Here's a new quote from your link:
"The natural progress of things is for liberty to yeild, and government to gain ground." - Thomas Jefferson to Edward Carrington, Paris, May 27, 1788
I'll go on to my righting fantasies about Thomas Jefferson thinking Government was the enemy of liberty now. No idea where I came up with such an idea, but I'm sticking to it none the less.
A private company can not put me in prison without government help.
A Government can.
Some private companies I do not like. Most I do not have business with.
A few I am "Forced" (Meaning I am too lazy to figure out a different way) to do business with (Microsoft).
There is no competition for government.
I fear Government. There is no corporation (Even the Evil Microsoft) that I fear.
Why is it so hard to only have politicians for a few years, then have them go away?
is another person's prudent planning. Unless there is a law being broken, an accounting principle being misinterpreted or other such wrong doing, I don't see the problem here. Google is just doing what every company (and individual) does, or should be doing - structuring their business to be tax efficient. Google sell ads on the Internet - which in inherently borderless. Tax codes in most jurisdictions are ill suited for eCommerce and revenue hungry tax agencies are constantly looking for ways to get a piece of this business. If Google were actually doing something illegal, this would be an HMRC investigation rather than Parliamentary grandstanding.
If you aren't part of the solution, then there is good money to be made prolonging the problem
I don't remember him saying, "You didn't build that (company)!" Oh! YOU added that in there! Gotcha. Well gee I guess if we can just add in the stuff we want to believe people said then it's fine. "(the government)....makes a nation great." - Impy the Impiuos Imp Wow you are such a socialist!
No he didn't misspeak, he was taken out of context.
Just wondering what is there to protect you from ? You both disagree on what Jefferson thought ? If anything the constitution is actually preventing you to be safe, by making sure the government will not shut up either of you.
oh hey guys! look! it's a troll!
if I worked for google why the hell would I be posting here?
Funny thing about that, for the last 30 years the tax burden has been steadly shifted from corporations and the leisure class to "the people mopping floors living at the poverty line"
It's not just about tax dodging which most corporations do but the fact that google is possibly lying and not legally paying minimal tax. Can you give a reason to believe Microsoft or anyone else for that matter is doing the same?
If you do something that is illegal in your country but legal on the server where you are doing it then you get in trouble because you're in the country where it's illegal. You've committed the act in that country. It only makes sense then the purchase, if made in the UK, is UK revenue and therefore UK tax should be paid on it. Just treat the corporations like you'd treat your citizens.
Funny thing about that, for the last 30 years the tax burden has been steadly shifted from corporations and the leisure class to "the people mopping floors living at the poverty line"
Sorry, but you haven't looked at the tax rolls lately. Remember the 47% who don't pay taxes. Those are the people mopping floors. I am the one of the middle class people still paying income taxes and, in my opinion, that's why the country is going broke. Everyone who earns money should be paying their fair share to support this spendthrift government. Even if it's just $20.00 a year. Everyone who votes, should have a 'dog in the race'.
Since when is "public safety" the root password to the Constitution?
You're missing the fact the government and the corporations are practically the same entity now. There's an open door between mid-level government bureaucrats, mostly regulators, who go to work for private firms, and their co-workers who.go back into government. Many people in oil, pharma, and finance, especially banking, spend time as regulators, and then go to work for the companies they previously regulated. Private individuals can't really fight corporations (viz. the oil spill in Arkansas). Only government is powerful enough to control the corporations, and smaller government will make it weaker in that regard.
Everything I've ever learned the hard way was based on a statistically invalid sample.
Apple UK had revenue of £1B, and a profit of £81.3M
Apple is famous for their .813 Profit Margins *rolls eyes*
By living in a democratic country you have a guaranteed slice of control on the government and therefore there is some accountability.
This is a fallacy. With government as large as the combined federal, state, and municipal components that make up the bureaucracy of the United States, accountability to a single person or even any particular locale is diluted to the point of being nearly inconsequential. Larger government bodies tend to do what they want, with little actual oversight or consequences for their actions in such a climate. While those bodies are comprised of individuals, the personal responsibility and accountability measures of any single individual in such large bodies becomes diluted in a similar manner. Reference the TSA for practical examples of how this state of affairs comes to pass and the consequences for civil liberties.
With private entities, the accountability is only to the shareholders, which exclude most of the masses. That's in the best of cases, with a privately owned company, you don't even have access to that.
You fail to mention an individual's ability to leave a company should his or her beliefs and needs fail to be satisfied by that company. Apathy on the part of the population and a culture of "gimme gimme gimme, I'm owed everything I want" may reduce the tendency for people to exercise this ability, but it doesn't change its validity. You also fail to mention an individual's ability to start a business venture of his own that acts in a manner aligned with that person's beliefs; apathy and laziness tend to inhibit this as well, but that's the fault of the person, not the rest of the world. There has always existed a relatively small subset of the population that actually builds things and manages their growth, with the balance of the population largely filling what might be considered basic support roles in any given industry. Everybody isn't the same, and pretending they are accomplishes nothing.
The only difference at this stage is market pressure which address the "unskilled" bit of your rant. That should allow you to get a better service in theory. Of course there is the drawback that you need unskilled bureaucratic control to make sure the market is fair.
Would you consult an automotive mechanic for medical questions? Would you feel comfortable hiring a doctor with no background in information technology to act as the chief technology officer for a company you founded? What you're proposing is in fact worse than either of these options, and to say it's an inefficient proposition is generous at best.
TLDR: You make a very weak attempt at justifying the personal insult against GP in your second paragraph and trick slashdot moderators to mod you up.
People spend entirely too much focusing on whether somebody else might have his feelings hurt in the process of examining how things work. This isn't about personal insults; it's about reality, which has little to do with whether people get upset over seeing their personal vision of how they want life to work confronted with the unfortunate reality of a harsher set of terms. You appear to suffer from a common tendency to think that the way things work now, for better or for worse, is somehow new and different from how human society has operated for ten thousand years. You're mistaken in that, and I suspect you'll continue to believe what you want because it's more comfortable than facing reality. That is your problem, not mine.
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A whole bunch of the folks who aren't paying federal income taxes also aren't paying state income taxes. I see you've nicely dodged the point regarding people paying their fair share in general, though. Most people would consider fair to be a number greater than zero.
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