A report published by the Sunday Times sheds light on the tone of British lawmakers’ grilling of Google over taxes last week: A former Google executive has turned whistleblower, showing the newspaper evidence he says proves that “what Google is doing is immoral.”
Lawmakers last week accused the Silicon Valley company of doing “evil” to “avoid paying [its] fair share of tax to the common good.” Google Vice President Matt Brittin reportedly told Parliament in November that Google promoted products in Britain but sales took place in Ireland, where corporate tax rates are lower. But the whistleblower, Barney Jones, has also talked to lawmakers and shown the Sunday Times contracts and invoices of deals being closed in Britain, and says he has more than 100,000 supporting emails and documents. According to the Times, Google had $18 billion in revenue in Britain from 2006 to 2011 but paid only about $10 million in taxes there.
The Times report came on the eve of Google Chairman Eric Schmidt’s Monday meeting with British Prime Minister David Cameron, who has talked tough about tax abuses. Other American companies such as Amazon.com, whose U.K. subsidiary reportedly paid $3.2 million in taxes on $4.2 billion in sales in 2012, are also facing scrutiny over their tax practices in Britain. The tax tiff in the U.K. also comes amid talk in the United States about offshoring taxes. Tax avoidance knows no borders — although companies are oh-so-conscious about borders.
Also over the weekend, Schmidt said Google supports talking about international tax reform. “Corporate taxation is rightly a hot topic,” Schmidt wrote in the Guardian. “And as a company that has always aspired to do the right thing, we understand why Google is at the centre of that debate.” He offered three main points he said he hoped “most people can agree upon”: that taxes be based on a company’s profit, not revenue; that politicians set the rules; and that international tax laws need to be reformed.
Photo of Google Vice President Matt Brittin after his testimony last week. (Neil Hall/Reuters)