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Discover How Google Hit with Large International Tax Bill
Author: Scarinci Hollenbeck, LLC
Date: May 5, 2014
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Despite the affinity that many consumers feel for large tech startups like Google, Apple and Amazon, a number of these companies have a habit of paying low tax rates both domestically and internationally.
Google is only the latest to be hit by a large tax bill in Europe, following a raid of the company’s Paris office by French revenue officers in 2011, according to Forbes. Last week, Google disclosed the existence of the tax assessment, which is reportedly massive, but did not include a Euro figure.
In documents filed with the U.S. Securities and Exchange Commission for the quarterly period ended March 31, 2014, Google noted that it anticipated such an assessment, writing that it believed that adequate provision had been made, and that it was “more likely than not” that its tax position would be sustained, but that it was possible that adjustments to its tax position could occur as a result of any resolution with French authorities.
While no one in the media knows precisely how much Google might be charged, sources in France told LePoint.fr that the figure was between 500 million Euros and 1 billion Euros ($693 million and $1.3 billion). Google pays France a very small percentage of taxes for its operations there by routing almost all of its revenue through the Netherlands, reporting it in Ireland and sending it on to Bermuda, where subsidiary Google Ireland Holdings is located.
According to estimates by various industry analysts cited by the news source, Google made a France turnover of between 1.25 billion Euros and 1.4 billion Euros in 2011, mainly from its advertising business. In 2012, Google’s turnover in the country was reported at 192.9 million Euros with a net profit of 8.3 million Euros. The company tated that the income taxes paid for 2012 amounted to 6.5 million Euros.
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Discover How Google Hit with Large International Tax Bill
Author: Scarinci Hollenbeck, LLC
Despite the affinity that many consumers feel for large tech startups like Google, Apple and Amazon, a number of these companies have a habit of paying low tax rates both domestically and internationally.
Google is only the latest to be hit by a large tax bill in Europe, following a raid of the company’s Paris office by French revenue officers in 2011, according to Forbes. Last week, Google disclosed the existence of the tax assessment, which is reportedly massive, but did not include a Euro figure.
In documents filed with the U.S. Securities and Exchange Commission for the quarterly period ended March 31, 2014, Google noted that it anticipated such an assessment, writing that it believed that adequate provision had been made, and that it was “more likely than not” that its tax position would be sustained, but that it was possible that adjustments to its tax position could occur as a result of any resolution with French authorities.
While no one in the media knows precisely how much Google might be charged, sources in France told LePoint.fr that the figure was between 500 million Euros and 1 billion Euros ($693 million and $1.3 billion). Google pays France a very small percentage of taxes for its operations there by routing almost all of its revenue through the Netherlands, reporting it in Ireland and sending it on to Bermuda, where subsidiary Google Ireland Holdings is located.
According to estimates by various industry analysts cited by the news source, Google made a France turnover of between 1.25 billion Euros and 1.4 billion Euros in 2011, mainly from its advertising business. In 2012, Google’s turnover in the country was reported at 192.9 million Euros with a net profit of 8.3 million Euros. The company tated that the income taxes paid for 2012 amounted to 6.5 million Euros.