Google 'DOES DO EVIL', thunders British politician

Re: An open letter

So if Google are selling in the U.K. this is illegal, but if they are marketing it's OK.

So when does marketing become sales ?

Re: it sounds like the possibility exists

No it doesn't. It sounds like a politician is pissed off and demagoguing the issue. If MP has the evidence he should produce it. If it is a real whistle blower there are laws that protect them so long as the government wants them protected. Or is innocent until proven guilty even less of a reality in Old Blighty than it is in the US?

Re: An open letter

"If sales are being concluded in the UK, you're misleading [UK's taxmen at] HMRC."

""You're a company that says 'we don't do evil' and I think you do do evil in using smoke and mirrors to avoid paying tax," she said."

She's not accusing them directly of doing anything illegal as she knows that here evidence isn't strong enough and Google's legal team will destroy her. She only mentions avoidance (which is legal) and suggests that if they were selling in the UK then they would be misleading HMRC.

Re: An open letter

This comes down to the issue of somantics and what selling actually is.

On the governments side of the fence, selling is the act of pushing the deal, which is what google employees are being told to do. You get a customer you convince them to buy a product and then to seal the deal you forward them to your "sales department" which effectively reads the details back to the customer, and then gets them to agree to the contract.

Google are arguing that the sale is the process of closing the deal, which is what the sales department are doing.

This is one of the problems with somantics, everyone interprets them in the way that best suits them. Personally I'm in agreement with the government on this one. Even though they aren't the ones finalizing the deal, the UK workers are still attached to the sale (otherwise how would they get their bonus?)

Honestly though I'm still worried that if these 'loopholes' are fixed it'll just drive business away. Why stick around in the UK and pay our incredibly high taxes, when they can close down shop and move everything to ireland where it's cheaper for them.

I'd still argue that if / when these loopholes are fixed, a tax cut would be in order, just to encourage big business to hang around (as well as encouraging others to come back)

Re: An open letter

isn't the next step, HMRC taking a really good look at the books? It ought to be....

If the company was in the wrong, they blame some individual engineer accountant, and start negotiating on some settlement for the difference.

Court cases come much later

Re: next step is a court case

assuming of course the MP has actual evidence as opposed to a well written bluster that plays well with the masses he is trying to buy off with Google's money.

Re: An open letter

" But they have to be 'seen' to be doing something for the economic good of the country..."

fine, they can return their salaries and all the dodgy expenses over the last decade

Re: Google don't pay taxes.

Google pays it employees and stockholders more. Care homes and poor houses aren't needed. Kids not only get to eat, they get to pay for college. Ergo Google are not Evil!

Re: Is it so easy?

Well that is the issue. It is not so easy to create a law - which has to be black and white once case law is created. Any grey areas just create loopholes and tax avoidance.

So, if you say that a lot more 'product' and 'sales' work goes on in the other countries - then is this the definition in law? Every country that has more customers than the parent company has to be set up for local taxes on all customers in that country?

Not exactly fair though is it. If, the UK for instance, has 1million customers of company x and they are based in Ireland which has 900,000 customers then they pay corporation tax to the UK? However they have a push and get 1.01 million customers in Ireland and now they can stop paying tax altogether in the UK? What about smaller countries with a lower user base, will they never get tax from any business that isn't based in their boundaries?

Maybe it goes on company size? Well Google employ 3000 people in Ireland but only 1,300 in the UK. Therefore they would be right to HQ in Ireland, surely?

Maybe everywhere you have a customer you have to pay tax on that customer? Well this isn't corporation tax, it's duty and VAT.

So do you split their profits among all the countries based on a factor - but what? Customer size, Customer revenue, staff numbers? This would be a loophole any decent accountant could drive a truck through. You are likely to kill off the super-widget maker's dreams of European sales mentioned above. What if the customer buys goods from the internet in a country that doesn't actively market there?

In reality in a free market in Europe a company should be allowed to choose when to set up their headquarters. The same way that Wales or Scotland might reduce taxes for the Amazon warehouse in Swansea or Edinburgh. The same way you can choose to buy something from France if it is cheaper and you live in the UK.

It's not straight forward, if it was then there'd be legislation already.

@Uffish

The real problem is that you've bought into the socialist demonization of corporations and expect to bleed them dry instead of rationally examining real-world problems and fixing it that way. I'm no fan of the progressive income tax or the privacy invasions that come with income taxes. I accept however that a flat income tax eliminates the issues you are ranting about. Regardless of whether the Google employees in London are marketing or selling they are undeniably being paid for a job in London. Tax their wages in London and you get the revenue.

What's that you say? No sane person would ever pay the income tax rate that would be required to support your government programs? Not my problem. Not Google's either. That problem lies in the evil you and the rest of the people who voted with you have created.