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Former Executive Reveals Shady Google Tax Scheme

by On May 19, 2013

google tax scheme

Barney Jones,  34 years old, who used to work for the tech giant Google between 2002 and 2006 in an executive position, just revealed some of the “immoral” practices of the company when it comes to tax avoidance, the Google Tax Scheme, as he calls it. If you are a regular Joe, a law abiding citizen, you know that two things in this life are sure: death and taxes. Well, things don’t look the same if you are a huge corporation like Google. The world is a much better place when you have huge amounts of money, let’s take a look further. Google’s tax scheme worked by diverting the company’s profits made in Britain through Ireland and from there, to a Bermuda offshore. An offshore is a tax haven, where no questions are asked, basically, and taxes are ridiculously low, Cyprus is a recent example of tax haven gone bust due to corruption and unfair practices. The former Google executive detailed how Google’s employees  in Britain made deals and signed contracts with UK customers, money was received into a UK bank account, the deal was actually made via the Dublin (Ireland) headquarters in order to reduce to a minimum the company’s liabilities here. To support these extraordinary claims about the Google Tax Scheme, Barney Jones declared he can provide over 100.000  emails and various documents describing the matter in question, and he is ready to show them to HM Revenue & Customs (HMRC). He already appeared and testified in front of Commons public accounts committee (PAC), and due to its testimony, Google’s vice-president, Matt Brittin, had to answer some very uncomfortable questions last week. To quote Mr Jones about the Google Tax Scheme : “The real victims are ordinary taxpayers in Britain who are being cheated by Google. They don’t have the means to hire accountants to pretend they make their money in Ireland, Bermuda or the British Virgin Islands. What Google is doing is immoral.”

google tax scheme

This story about the alleged  Google Tax Scheme raises big questions about the tech giant’s corporate sense of morality and business practices, if they do that in UK, they do it everywhere. To get an idea, Google had revenues of $18 billion between 2006 and 2011 in Britain only, yet they paid ~$15 million in corporate tax. Jones accused Google’s vice president Matt Brittin of misleading information given to the UK’s parliament. When he was questioned last year by PAC, he claimed that Google never sold advertising in their UK office.  Yet, last week he told PAC that “a lot of aspects of selling” actually happened in London but the actual deal took place in Google’s offices in Dublin, Ireland. This little difference is essential, because if the deal would be closed in London, Google would have to pay more in tax than in Ireland. As Jones puts it regarding the Google Tax Scheme, let me quote: “It uses a concocted scheme to avoid tax. It’s a smoke-screen to distort where the substance of its economic activity is really taking place,” In 2011, Google paid ~$10 million (6 million British pounds) in taxes in UK, yet consulting its US accounts, Google had a turn-over in UK of 2.7 billion Pounds and a profit margin of 26%. Translating in real taxes, they should have paid more than 180 million pounds instead of 6 million. Google uses a Bermuda tax haven too, where it pays the royalty fees via its offshore subsidiaries, in order to avoid paying taxes in UK. Source: The Sunday Times

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