EU politicians to push for investigation into Google's tax practices
POLITICIANS in Germany and France say they will press for Google to be quizzed on corporate tax after a Reuters report highlighted how the company employs sales staff in the UK while telling tax authorities 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, which makes most of its money through selling ads, has no taxable presence in France, Germany or Britain, allowing it 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 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 €1.7bn in back taxes.
Google spokesman Peter Barron said the company follows tax rules in every country where it operates and said: "We accept that the wording of some job adverts may have been confusing, and we are working to make it clearer," he said.
In Germany, Sven Giegold, Member of the European Parliament (MEP) for the German Green Party, said he would call on the tax authority in Hamburg, where Google Germany is based, to investigate the company's affairs.