Google Inc (NASDAQ:GOOG) just can’t seem to get in the good graces of people in authority in Europe. Whether it’s being investigated for possible monopolistic business practices to issues with user data and privacy, to whether the company pays the “right” amount of taxes, it seems that while European consumers generally like Google and its services, the authority figures and bean counters there have a hard time with the Google business model.
But it seems that Google Inc (NASDAQ:GOOG) could be shining a light on some things in a similar fashion that Apple Inc. (NASDAQ:AAPL) CEO Tim Cook did on the U.S. tax system when he spoke before Congress late last month. As a very large multinational company, Google is extremely visible to where many media, government figures and consumers (not to mention shareholders and investors) keep a close eye on the company’s doings. So when Google has a chance to speak about something, it will get attention and draw attention to that issue. And it seems that the purpose now is for Google to present to the public the flaws in the European Union and U.K. tax codes that the legislators put in place.
But Google Inc (NASDAQ:GOOG) will have an uphill battle in the PR wars with the U.K. government, as it released a report Thursday that rips Google for avoiding taxes, making claims that the company’s complex corporate structure does not do anything other than help the company skirt around the tax laws. Google pays taxes in Ireland, where its U.K. base is, and that country has the lowest corporate tax rate in the entire EU at less than 13 percent. By taxation rules, Google maintains that all of its sales go through the Ireland office, and the Google staffers in other parts of the U.K. do not conduct sales roles for the company. However, the U.K. government was citing an expose done by Reuters that seemed to give evidence that Google was indeed conducting sales outside of Ireland, which means that Google should be subject to more taxation in the U.K. Due to the rules in place, it was reported that Google paid only 0.1 percent of its U.K. revenue in total taxes, which would have been in the range of about $15 million.
So what did the report say, exactly?