More Google tax dodging: and this time the might actually get done
WE’VE had all sorts of people whining about how Google doesn’t pay enough tax, from MPs down to the fools at UK Uncut. There’s a problem with the complaints they are making, quite an obvious one. But here’s a story where Google might actually be forced to cough up:
Australia released draft revisions to tax laws on Thursday, which it said were designed to stop big firms, including the local arm of Google, from shifting their income to countries such as Holland or Ireland where the tax rates are lower.
What Google is doing in Oz is pretty much the same as it does here. Sure, they’ve engineers there as here, they sell ads there as here and there as here they say that actually, the ads are being sold from Ireland, not the UK or Oz. That way, the revenues from the ads go to Ireland and the profits taxed at 12.5%. Not at the UK or Oz rates.
Hmm. And it looks like Oz is changing the rules so they cannot do this. OK, good for Oz. But obviously, the next question is, well, if they can, why can’t we? For it is true that we can’t and they can.
The reason being because European Union. The tax rules inside the EU are different from the tax rules across other international boundaries. We’re not allowed to stop Google Ireland from selling in the UK. The whole point of the Single Market is that we’re not allowed to. Oz can, we can’t.
It was exactly the same with the Vodafone fuss. If the subsidiary company had been in Grand Cayman then everyone agrees that it would have had to cough up tax to the UK government. As it was in Luxembourg it didn’t. Because the rul;es inside the EU, because of the EU, are different.