Being called up before a congressional sub-committee is not an ideal way to spend an afternoon. Getting called up before MP’s (members of parliament) is a skewing and roasting, at best. While politicians in the U.S. might grandstand a bit, and make their personal statements through you to their constituents, the British just do it better and aren’t afraid of saying anything to make their point to the nation and their colleagues.
In a report by the Guardian, Google Inc (NASDAQ:GOOG) is presently being raked over the coals in front of parliament on suggestions of tax evasion. While they are strong suggestions, no charges have been filed against Google lest the conversation would not be taking place in parliament but rather court.
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The MP’s are claiming that Google Inc (NASDAQ:GOOG) has been selling advertising in the UK and are consequently owed sales tax. Google on the other hand, maintain that its work in the UK is solely marketing and that all sales go through Dublin, its hub for the UK and the rest of Europe.
Vice-president Matt Brittin, Google’s head of operations in northern Europe, denied any wrongdoing and he stood by evidence he gave last year that all the company’s European sales were routed through its operation in Ireland and so were not liable to UK taxes.
But he was told by the committee chairman, Margaret Hodge: “You are a company that says you do no evil and I think that you do do evil in that you use smoke and mirrors to avoid paying tax.”
Google Inc (GOOG) Avoiding Fair Share Of Tax
The Labour leader, Ed Miliband, took it a step further when he said, “People will be shocked by the evidence that Google Inc (NASDAQ:GOOG) is going to extraordinary lengths to avoid paying their fare share of tax. It comes on top of other firms apparently engaging in similar practices. It is evidence of a culture of corporate irresponsibility among certain firms which is totally unacceptable.”
While the tongue lashing continued, Matt Brittin was finally allowed to speak. Granted the words that came out of his mouth were certainly just a matter of what he was instructed to say.
“I stand by everything I said last November,” he said.
“Any advertiser in the UK or Germany or France or any European country contracts with Google Inc (NASDAQ:GOOG) in Ireland because that is where they have the rights to sell Google advertising. The way we are established is Ireland owns the technology and owns the intellectual property for the purposes of selling across Europe.”
“People in Google UK Ltd are promoting our properties and encouraging people to spend money with Google Inc (NASDAQ:GOOG). Clients may well feel that they are selling – we hire people with sales skills and they are encouraging people to spend money. But what is very clear is that no-one in the UK team can execute a transaction, no money changes hands.”