December 20th, 2009 2:47 pm EST
UK Politicians Up in Arms Over Google Diverting UK Revenues Through Irish Subsidiary
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Many politicians in the United Kingdom are very unhappy about the revelation that Google legally avoided paying more than 450 million pounds (about $726 million USD) in corporate taxes to the UK government last year.
Google apparently diverted all of its advertising earnings from Britain to its Irish subsidiary, which allowed the company to pay a much lower tax bill.
The Sunday Times (link below) revealed that Google paid just 140k pounds in taxes to the UK government last year, and that this tax was derived from the interest that accrued on the company's cash stockpiles in UK banks.
The paper also revealed that Google UK Limited made charitable donations of just over 5k pounds last year.
Google brought in approximately 2.6 billion dollars USD in advertising revenues from the United Kingdom last year, which accounted for approximately 13% of its total worldwide revenues.
Many politicians in the UK are spitting mad over these revelations, arguing that Google has a duty and "social responsibility" to pay its fair share in taxes.
Google, for its part, argues that the avoidance of British taxes is completely legal, and that their European operations are based in Ireland anyways. They also argue that the 800 employees that the company employs in Britain contribute to the tax revenues of Britain.
Should Google "pay its fair share" of taxes to the United Kingdom. or is it simply being a smart company by minimizing its tax burden?
Source: The Sunday Times
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