Google to be pressured on income tax

LONDON - Reuters

A view of the interior of the new Google France headquarters. REUTERS photo

Politicians in France and Germany say they will press for Google to be quizzed on corporate income tax after a Reuters report highlighted how the company employs sales staff in the United Kingdom while telling the tax authorities that sales are made from Ireland.

The report showed the company advertised for “sales” staff to “negotiate” and “close” deals, although a Google executive had told parliament its London-based employees did not sell to UK clients. British lawmakers plan to call Google to testify again to a parliamentary committee to clarify what work it does in Britain.

Currently Google, which makes most of its money through selling advertisements, has no taxable presence in France, Germany or Britain, allowing it to operate almost tax-free in these countries. Whether staff in a country sell could have a big impact on its tax bill, tax lawyers and academics say.

Like Google UK, Google designates its French and German units as providers of marketing and support services to Google Ireland, which pays most of its turnover to an affiliate in Bermuda; and gives the subsidiaries enough to cover their costs and generate a small taxable profit.

In April, Google advertised dozens of French and German-based positions in job categories that fall within the area it describes as “selling”. It has now changed many adverts, but several staff based in France and Germany still say on networking website LinkedIn that they fulfill sales roles.