Google set to pay £380m in France despite UK being its largest base

[scooterscot]

Google is about to pay THREE times as much tax in France than UK | Daily Mail Online

Google's worldwide web of tax loopholes: Osborne under fire as Google is set to pay THREE times as much tax in France - even though it employs thousands more people and does more business in Britain

Google is set to pay three times more back tax to France than the UK, despite making three times as much money and employing four times more staff in its British outpost (pictured)
Google is set to pay three times more back tax to France than the UK, despite making three times as much money and employing four times more staff in its British outpost (pictured)
The Government was today accused of incompetence after agreeing Google could pay £130milllion in tax even though the web giant is about to hand over three times more in France.

Aggressive French officials are close to getting £380million from Google even though Britain is its biggest market outside the US and employs thousands more people than in France.

Paris tax bosses have refused to accept Google's ploy of funnelling its international sales via Dublin to benefit from Ireland's lower tax rate.

George Osborne hailed the £130million deal as a 'victory' for the taxpayer but critics branded it 'derisory' because Google has made around £6billion in profit in the UK in the past decade.

Yesterday even Downing Street distanced itself from the Chancellor's claims and the agreement is now going to be subject to three inquiries.

Both Google and HM Revenue and Customs are now set to be hauled in front of MPs to explain the deal, after the Commons public accounts committee and the Treasury committee last night launched separate inquiries.

Sources at the National Audit Office revealed they are also poised to investigate the deal.

HMRC officials have taken six years to get the the internet giant to pay back just £130million to cover a decade of back-taxes.

This means they have been taxed at a rate that may be as low as 3 per cent - although the Government is still refusing to disclose what they charged them for 'confidentiality' reasons, minister David Gauke said yesterday.

[AtW]

Not sure exactly what period £380 mln convers, but I reckon correct annual tax figure in France should have been £200-300 mln, given that their corp tax is 33%. UK should be at least £200 mln plus VAT (at least some of it is not recoverable by small firms).

[MarillionFan]

Don't like it, then get the ISPS to block the google address and be done with it.

[Waldorf]

Google set to pay £380m in France despite UK being its largest base

Not sure exactly what period £380 mln convers, but I reckon correct annual tax figure in France should have been £200-300 mln, given that their corp tax is 33%. UK should be at least £200 mln plus VAT (at least some of it is not recoverable by small firms).

I agree that the tax from Google should be a lot more, part of the issue is that they book the sales in Ireland and so with little 'sales' in the UK and high overheads then the 'profit' is smaller than expected. Clearly this is a sham and needs to be addressed.

Not sure of your point on the VAT - the fact that a small, not VAT registered business cannot reclaim the VAT isn't the fault of Google, this is the case with any company.

[tomtomagain]

If the UK is the largest base for Google then they'll have more costs here which they can offset against tax.

For example they've spent £650M on a new building which can house 4.5k staff. ( Link )

Apparently there are 2000 UK staff paid an avearge of £160k each ( Google UK staff earned average wage of £160,000 each in 2015 | Technology | The Guardian

I have tried to find out what sort of presence Google has in France but I cannot find anything to say that they have anyone at all. I assume there must be some French staff, but maybe not?

So it is probable that they can have a lower tax-take in the UK when compared to France BECAUSE they are investing in the UK and not in France.

Makes sense?

* * * They still pay too little though!

[AtW]

Not sure of your point on the VAT - the fact that a small, not VAT registered business cannot reclaim the VAT isn't the fault of Google, this is the case with any company.

The point on VAT was that Google put all sales via Ireland, so VAT (for businesses that were not VAT registered) was sent to Ireland and UK did not collect it - I don't know how much, but it would be substantial amount given massive sales: £1 bln sales, 20% VAT, if 10% of customers by value don't have VAT registration then £20 mln per year lost.

[AtW]

For example they've spent £650M on a new building which can house 4.5k staff.

That's not tax deductable.

Also, I am pretty sure that it wasn't Google (UK) that bought it - most likely the cash comes from Bermuda or some other place where it got laundered from taxes.

Apparently there are 2000 UK staff paid an avearge of £160k each ( Google UK staff earned average wage of £160,000 each in 2015 | Technology | The Guardian

Yes, that's tax deductable: £1 bln gross profit, less alleged (I find it hard to believe personally) £320 mln staff costs - tax due on £680 mln - there was never a problem of employment costs reducing taxable base, the issue was that they paid literally fook all for a decade.

If Google spent all income from UK on salaries taxed at 45%+NICs then it would be even better for taxpayer than having issue over non-payment of 20% tax.

[SueEllen]

The staff aren't paid an average of £160k each. Google isn't a good payer as they don't need to be as they can rely on the name. They do give their staff loads of perks though.

[AtW]

The staff aren't paid an average of £160k each. Google isn't a good payer as they don't need to be as they can rely on the name. They do give their staff loads of perks though.

£160k average sounds like a total BS figure to me.

[Waldorf]

The staff aren't paid an average of £160k each. Google isn't a good payer as they don't need to be as they can rely on the name. They do give their staff loads of perks though.

If you look up the accounts for Google UK, the employment costs were £289m for 1835 employees, this included share bonuses of £67m - but the average comes to £157K each. The accounts are quite old, December 2013 so things will have moved on since then.