Is Google a Tax Evader?

Google Denies Tax Evasion In China:

In response to some Chinese media reports that Google China has been involved in tax evasion and is being investigated by the Beijing Municipal Local Taxation Department, a spokesperson from Google China has clarified that they have never received a notice from BMLTD on the investigation and the rumormongers may have ulterior motives.

According to news reports on Ccidnet.com, Google reportedly began to provide Chinese language search services in China as early as 2000 and launched its Chinese keyword search in 2003, but the company did not record any of its business transactions in China until it set up a branch in China in 2006. According to China's policies mentioned in the article, once a foreign company begins business in China, it is reportedly obligated to pay the taxes for the previous five years. So the report estimates that Google might have evaded over RMB100 million in taxes in China in the five years before 2006, based on its gross income of RMB285 million in 2006.

Is Google a Tax Avoider or a Tax Evader?

Google Norway does its best to avoid paying Norwegian taxes, but is this illegal?

The Norwegian newspaper Dagens Næringsliv reports today that Google does its best to avoid paying taxes to the Norwegian government.

Google Norway had an official turnover of NOK 33.6 million last year (US$ 6.2 mill). However, as Dagens Næringsliv points out, that is only a fraction of the unit’s real revenue. Unnamed media companies estimate that Google sold pay per click text ads in Norway for NOK 200 million last year (approximately US$ 37 mill), and is expected to generate twice as much this year. Still, last year Google Norway paid only NOK 1.5 mill in taxes.

How does Google do this? According to Dagens Næringsliv the income is turned over to Google Ireland. It is Google Ireland that bills the Norwegian AdWords customers. ...

When signing up for an AdWords account anywhere in the world you may ask for your ads to appear in any territory, region, country or language. Hence you may select to have your ads presented at Google sites in Norway and Denmark and not — let’s say — in the US or the UK.

Does this mean that Google in this case should be taxed by both Danish and Norwegian authorities? That would make this kind of trade extremely complicated.

If you on the other hand was selling cars in Norway and Denmark, you would definitely have to pay local taxes.

We are neither lawyers nor tax experts and are glad to leave this conundrum to the professionals.