
 Google pays no tax on £1.6bn in Britain - AndrewWarner
http://technology.timesonline.co.uk/tol/news/tech_and_web/article6962880.ece
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petercooper
Casually forgetting the income taxes paid by the employees, of course, though
the millions paid in social security contributions (NICs) is mentioned almost
as a footnote.

I'm a major fan of The Sunday Times, but I can't believe they went with a non-
story whose only intention is to ruffle the feathers of the Times' high income
demographic (who are getting taxed to death themselves). What Google's doing
is, on the surface, fully compatible with EU tax law. Devolving most of our
powers to the EU is the British government's fault, not Google's.

~~~
shykes
How would things be different if the UK wasn't part of the EU?

~~~
petercooper
At the least, VAT collectable by the UK would have been charged and earned on
all of that £1.6bn (which would be well into the £100~200m range). Instead,
Ireland got the VAT due to EU VAT collection harmonisation.

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jmaygarden
I fail to see what Google has done wrong. Why wouldn't they place their
European headquarters in a EU country with the lowest corporate taxes rates?
Also, how does the UK have any more right to complain than France or Cyprus?
This is just political grand-standing!

~~~
ronnier
They've done nothing wrong. But what they have done is promote and campaign
for politicians who advocate higher taxes, then turn around and do everything
possible to avoid such taxes.

<http://online.wsj.com/article/SB122446734650049199.html> (Google CEO Eric
Schmidt will hit the campaign trail this week on behalf of Barack Obama)

[http://gawker.com/5119039/google-execs-pay-150000-for-
obama-...](http://gawker.com/5119039/google-execs-pay-150000-for-obama-bash)
(Google Execs Pay $150,000 for Obama Bash)

~~~
cma
Only hypocritical if you don't understand what a tax is. Obama didn't go out
and advocate that individual corporations voluntarily pay more in taxes. All
that would do is make the companies that voluntarily did it disappear from the
marketplace as they get outcompeted. He advocated that to solve a collective
action problem, a majority dictates (with teeth) that _all_ parties pay more
taxes.

Presumably Google could be in favor of Britain fixing the loop-hole (if it
really is one) it it affects their competitors as well as them, but they
aren't going to voluntarily stop using.

It is like saying someone who advocates that we all quit ironing our pants in
order to save energy, but in the meantime keeps ironing theirs, is a
hypocrite. That isn't true, and it is a misunderstanding of what they
advocated.

~~~
dantheman
The ironing example is being a hypocrite. One should lead by example, if they
really care about saving energy they will change their behavior to save it.

~~~
cma
Nope, it is a collective action problem. There is a simple game theory payoff
matrix:

(units: e=energy_savings, ss=social_standing)

One guy's payoffs:

    
    
                             one guy
                             iron                | no iron
        everyone    iron     0ss - 0.1e = (-0.1) | -1ss + 0e = (-1.0)
                    no iron  1ss - 0.1e = ( 0.9) |  0ss + 0e = ( 0.0)
    

Society's payoffs (1000 people):

    
    
                             one guy
                             iron                    |  no iron
        everyone    iron     0ss - 100e = (-100.0)   |  0ss - 99.9e = (-99.9)
                    no iron  0ss - 0.1e = (  -0.1)   |  0ss -  0.0e  = (   0.0)
    

Ironing his clothes gives the person no greater benefit than not ironing their
clothes-- _so long as no one else irons their clothes either_. It isn't
hypocritical to point this out and still iron your clothes.

~~~
dantheman
I understand that that it's a collective action problem, but game theory only
applies if things stay constant. By practicing what he preaches, and taking
the hit to ss he shows that it is important, and he can use that to convince
others to do it. As more people do it, the loss of ss per person goes down,
and it might even invert (lose ss for ironing).

~~~
shykes
What if not ironing your pants affects your income significantly?

~~~
dantheman
That's the price you pay for standing up for what you believe in.

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abrahamsen
Murdoch shouldn't be the one to point fingers, News Corporation (which owns
Times) is one of of the world leaders in tax evasive subsidiaries.

[http://www.bloomberg.com/apps/news?pid=20601087&sid=aK0a...](http://www.bloomberg.com/apps/news?pid=20601087&sid=aK0aqjwsiSCA&refer=home)

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naz
I think the Google gives the UK a lot more than just taxes.

~~~
illumen
Ad spam on web pages of the world?

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yason
Sounds like what any company big enough would do.

If this bothers the British, they might want to consider a law that allows
them to tax both funds transferred to another country as well as funds
reported as the company's local income.

That way the country would always get their share should Google decide to have
a presence in the UK.

~~~
bensummers
As a member of the EU, the UK can't pass such a law. We've given up some
sovereignty for the benefits of being a member of the larger entity.

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Locke1689
I have to say, what they've done seems perfectly legal -- in British law as
well as Irish law. If the Brits feel wronged by this, perhaps they should
consider changing the laws that allow it?

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pmcginn
And of course the only options ever presented in stories like these are more
regulation and stricter enforcement. How about lowering tax rates to compete
with Ireland?

~~~
kierank
Just take a look at Ireland's current fiscal and overall economic position.

~~~
handelaar
And imagine how much worse it would be if Google (and Facebook, and others)
weren't paying 12% Corporation Tax to the Irish Treasury.

~~~
drewbie
If you thought people were complaining about the December budget... wait till
the corporations start pulling up stakes wholesale!

The funny thing is Ireland has very good social welfare benefits - enough that
fraud is a serious issue. A coworker told me a recent (non-gov't)
investigation suggested it could be as much as 2 billion EUR per year. That's
my euros the fraudsters are taking but the government can't be bothered to
battle fraud more effectively! _sigh_

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robryan
Couldn't the government require that money collected from UK residents go to a
UK company?

~~~
jmaygarden
No, the UK cannot enforce such a law without violating membership in the EU.

