Tuesday, 11 December 2012

The Tax controversy continues. Now Google is in the frame. And Ireland is still in the dock.

Google now enters the frame regarding the ongoing tax controversy in the UK, Europe and Ireland.

According to The Sunday Independent, it has paid less that 70 million euro tax between 2005 and 2011 on sales of 47 billion through its Irish operations. That's 0.14% tax.

It keeps tax bills low through royalty payments filtered through Ireland, the Netherlands and then eventually....Bermuda. Tax research UK said that Ireland has the "laxest transfer pricing rules of anywhere in Europe" and "Ireland doesn't ask questions of companies that are located there". It would seem we want them so badly, we let them off all the hooks.

France has raided their offices many times and slapped Google with a 1.68 billion tax bill on the other hand. Italy are doing something similar and have told parliament that they have found millions in undeclared income and unpaid tax.

A British parliamentary body have dubbed Google's tax practices, with notable reference to Ireland as "utterly immoral" because tax avoidance is not illegal per se.

Google is shifting income from where they do business to tax shelters - Ireland being Europe's biggest. The Starbucks issue is really bringing all this into focus and will lead to changes in international law.

Google Inc., the holding company for example was able to only pay 2.5 billion tax on 26 billion of profits in 2011. Not bad eh?

There's no doubt Google do comply with all Irish tax regulation but this is what is being called into question. Ireland and a tax regime that helps large multinationals avoid tax elsewhere.

The whole saga is unravelling and Ireland is starting to look like the con of Europe. Our European partners will not let us away with this any longer.