Google defends low tax payment

 

Google Ireland has defended reports it paid just 0.14 per cent tax on revenues over €47 billion, saying it has made a significant contribution to the Irish economy through investments in the country and the employment of 2,500 people at its European headquarters in Dublin.

The company said it had invested €75 million in its recently opened data centre and another €226.9 million in the acquisition of three office buildings in Dublin in 2011.

Google Ireland had a turnover of €47.44 billion between 2005 and 2011. However, the internet giant paid a total tax bill of just €69.91 million, according to the Sunday Independent.

Google’s tax reduction method takes advantage of Irish tax law to legally move profits in and out of subsidiaries in Ireland, eventually lodging them in Bermuda, which levies no corporate income taxes.

Shareholder return

“We have an obligation to our shareholders to run our business efficiently and we comply with all the tax rules in Ireland,” a spokeswoman said.

Coffee chain Starbucks has also defended its Irish tax regime, which saw the company pay less than €40,000 in taxes here between 2005 and 2011 while paying €5.7 million in royalty and licensing fees to its parent company in the same period.

The company last week announced it would pay corporation tax in the UK – above what is currently required by tax law. The announcement came after weeks of criticism in the media and parliament following a report which said the international chain had paid no corporation tax in Britain over the past three years while telling investors the local business was highly profitable.

In an open letter, Starbucks UK managing director Kris Engskov said “Starbucks will commit to paying a significant amount of tax during 2013 and 2014.”