back to article Google Spain raided by Agencia Tributaria in latest European crackdown

Google's Madrid offices are its latest to be raided as the search giant faces a series of tax probes across the European Union. The raid was approved by a court in Madrid, Reuters reported, following a request by the Spanish tax authorities. Reuters cited a spokeswoman giving the company's rote statement on such matters, …

  1. Dan 55 Silver badge

    El armario está vacio

    Nothing to do with them having so much trouble collecting that they're resorting to naming and shaming?

    That's the second list of everyone who owes a million euros or more. The first one was published in December.

  2. Anonymous Coward
    Anonymous Coward

    Can we have an Inquisition?

    No one would expect that.

    1. Anonymous Coward
      Anonymous Coward

      >Can we have an Inquisition?

      While we are at it why not another civil war won by the fascist?

      1. Anonymous Coward
        Anonymous Coward

        Depends which colour of legend you support.

        What fascist? This is google, they do no evil.

  3. bombastic bob Silver badge

    why tax corporations at all?

    why tax corporations at all? Just have the stock-holders pay tax on the dividends as 'income'. That would encourage corporations to spend the money IN THOSE PLACES WHERE THERE IS NO TAX, and you'd get the 'trickle down' effect. Yeah, I actually BELIEVE that supply-side economics WORKS every time it's tried. Predictable thumb-down howler-monkey campaign will follow, yeah. I'll call it a badge of honor.

    1. Mephistro
      Facepalm

      Re: why tax corporations at all?

      "Just have the stock-holders pay tax on the dividends as 'income'."

      That'd be fine, were it not for the fact that your suggestion would work a charm for syphoning tax money from the country where the money was earned -e.g. Spain, France, 'Murica or the UK- to the place where the stock-holders "reside" -e.g. Bahrain, 'Murica or Bahamas- without accounting for the use by Google of the infrastructure -e.g. legal frameworks, police, transport, health, education...- provided by the country where the earnings were made without paying a dime for the privilege. What could possibly go wrong, eh?

      And by the way, here is a badge of honor for you!.

      HAVE a nice DAY!!!

    2. Anonymous Coward
      Anonymous Coward

      Re: why tax corporations at all?

      If country A doesn't tax corporate income at all, how does that translate into an incentive for corporations to spend more money in country A? They would instead prefer to move that spending OUT of country A into country B that does tax corporate income, in an attempt to reduce their corporate income (and therefore taxes) in country B.

  4. Sigfried

    Tax Avoidance is Legal Everywhere ! And I'll bet that not a single user or commentor on this site voluntarily pays more tax than they think they need to. So everyone is tax avoiding, because avoiding tax means paying no more than is legally required.

    Governments love to target overseas corporations, makes them look "tough" and there's the lure of "free moneys".

    And Google's settlement in the UK was over differences in the calculation of theoretical arm's length costings for services supplied to the UK arm. It was alleged that Google had slightly overcharged and hence reduced the taxable profit in the UK subsidiary. The transfer pricing rules are abstruse and there was a long argument on how the rules applied, but in the end Google agreed on a marginally lower price, effectively refunded the difference and then paid tax on the recalculated profits. Note that no penalties were incurred as it was a technical issue of interpretation over transfer pricing formulae. Over 10 years or so, the tax difference was 1.3M roughly per year, storm meet teacup anyone ?

    In cases like the UK one, I'd have little doubt that Google simply tries to apply the rules as best it can. Any savings are minimal (what's 13M to Google, after all, over 10 years !) and the cost of working through the case with the IRD possibly exceeded any potential savings.

    I'd suggest a lowish corporate tax plus full imputation of tax paid. That way there's a tax to catch all shareholders, then a tax credit to the same (but specifically the domestic) shareholders when a dividend is paid to the extent that the company has paid tax. So any reduction in the corporate tax payment reduces the credit to the shareholder as taxpayer. Overseas shareholders pay their share of the corporate tax and depending on their own domestic policies, may get a credit for that overseas tax paid.

    Remember too that strictly speaking, corporates don't "pay" taxes, those are ultimately only paid by real people; in some combination of the owners, employees, customers, and to a lesser extent, extended stakeholders. So the more tax Google pays, that actually comes form some combination of the employees pockets, the customer's pocket, and the shareholders pockets. It is hard to separate them and only some comes from the shareholders.

    1. Mephistro

      "In cases like the UK one, I'd have little doubt that Google simply tries to apply the rules as best it can. Any savings are minimal (what's 13M to Google, after all, over 10 years !) and the cost of working through the case with the IRD possibly exceeded any potential savings."

      Perhaps you'd like to amend that paragraph, or delete your comment, as it shows that you have no effing idea of the issue discussed. For starters, it's not "13 millions over ten years", but 13 millions for each of those years, totalling 130m. To add insult to injury, this is not the amount Google should have paid in taxes. That amount is a variable whose value is unknown, as the UK govt. and Google made a secret agreement that resulted in the 130m from where you, somehow, took your figures. Yep, 130m in taxes for many billions in sales, and no fine nor a comprehensive investigation on the means by which Google managed to pay such a low tax. Sounds about right, doesn't it?

      1. ratfox

        It's normal that there would be no fine if Google can convincingly claim that the way they paid taxes looked fair. When the additional tax paid is, as you said, so small, it's not unreasonable (and presumably the amount also looked fair to the tax service before politicians insisted they take another look).

        What is unreasonable is the law that makes it possible for Google to book all their sales in Ireland, when they have such a massive presence in UK.

        1. Mephistro

          "It's normal that there would be no fine if Google can convincingly claim..."

          True, but we'll never know if that's really the case, as the negotiations were secret.

          "What is unreasonable is the law that makes it possible for Google to book all their sales in Ireland..."

          No bigger truth has been said. But these loopholes have been known for years and the Powers that Be don't want to close them. :-(

          1. Oengus

            But these loopholes have been known for years and the Powers that Be don't want to close exploit them.

            FTFY

            1. ratfox

              I suspect that UK in particular hoped that their low (for EU) corporation tax rate would have lots of companies selling stuff in France and Germany and paying taxes in UK. They thought they were gaming the system.

              They never saw Ireland coming.

    2. John Brown (no body) Silver badge

      "Tax Avoidance is Legal Everywhere ! And I'll bet that not a single user or commentor on this site voluntarily pays more tax than they think they need to. So everyone is tax avoiding, because avoiding tax means paying no more than is legally required."

      The vast majority of people in the UK are on PAYE and are taxed at source when their wages are totted up. There;s no way to "avoid" tax or try to pay less. There are no loop holes. It's only those with loads'a'money who have the ability to move money around between accounts, subsidiaries, parents or countries or re-purpose it in "tax friendly" way and can afford to pay very expensive accountants and tax lawyers to do that for them, so long as those costs are more than outweighed by the salaries of said people.

      Most of the problem is the overly complex tax system, but that complex tax system was, at least in part, brought about by the people with loads'a'money promising to take their ball home if they don't get a special tax exemption. (not to mention the people creating the tax exemptions would like seats at the boardroom tables after they "retire" from politics).

      It's all legal corruption and "jobs for the boys" but I don't see any way out of it because every nation is in a race to the bottom to attract inward investment from the big boys.

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