UK Tax and Google: Cue Sinatra Singing Regrets, I Have a Few
February 2, 2016
This corporate tax thing is pretty exciting. I recall that in some of my early jobs, corporate taxes were mostly routine. Halliburton had a system, and it seemed to work in a swell way.
I read “Google Tax Deal ‘Not a Glorious Moment’, says Minister.” According to the write up:
Business secretary Sajid Javid says he shared Britons’ sense of injustice as criticism grows of agreement with tech firm.
Confused? I am. The “real” news story revealed:
The admission by the business secretary, Sajid Javid, came as a senior executive from Google claimed he could not say how much UK profit has been generated by the technology firm in the past decade, or how many meetings had been held between the company’s executives and ministers. It follows the announcement nine days ago that the government came to an agreement with Google in which £130m will be paid in back taxes covering the past decade.
I thought that Googlers used Google’s cloud services for calendaring, spreadsheets, and the like. I thought that it was easy for Google services users to check out who met whom and when. I thought is was pretty easy to set up an updating spreadsheet which calculated the tax owed on certain revenue items.
I obviously was wrong. That happens a lot.
The British government which strives to appear organized is apparently confused. I learned:
Peter Barron, head of communications at Google across Europe, told the Andrew Marr Show he could not answer questions about Google’s profits over the past decade despite reports that it had made £7.2bn and therefore is paying less than 3% in corporation tax on its UK profits.
The sums strike me as trivial. For example, I learned:
Google is expected to announce on Monday that it has amassed £30bn of profits from non-US sales in Bermuda, where companies are not liable to pay corporation tax. The UK is Google’s largest non-US market, accounting for 11% of its global revenues, according to documents filed in America. The Observer revealed that the UK government has been privately lobbying the EU to remove Bermuda from an official blacklist. Barron said the arrangement in Bermuda had no impact on the amount of tax it pays in the UK. “It’s very, very important to make it clear that the Bermuda arrangement has absolutely no bearing on the amount of tax that we pay in the UK. No bearing whatsoever,” he said. When asked how much of the £30bn may have come from the UK, he said: “I don’t know the answer, I haven’t got the answer [at] my fingertips, except I would say that about 10% of global revenues come from the UK.”
Like Google’s position regarding the alleged problems with its self driving cars, humans are making problems. I believe it. Troublesome humans. Use algorithms.
Stephen E Arnold, February 2, 2016
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