Feeds

Activist investors try forcing Google to pay more taxes

Shareholders' AGM motion would curb effect of Choc Factory’s 'tax strategies'

Internet Security Threat Report 2014

A group of Google investors has called on the firm to stop "undermining democracy and the rule of law" and start paying as much tax as possible in the countries it operates in.

The stockholders have put forward a proposal, to be voted on at the annual general meeting today, which would force Google to adopt a set of principles that would “address the impact of Google’s tax strategies on society”.

The firm has urged other shareholders to vote against the idea.

The Domini Social Equity Fund and five other investors said that the Chocolate Factory’s tax shenanigans were attracting attention from regulators and damaging Google’s reputation.

“When multinational corporations exploit differences in national tax codes to reduce their taxes, they undermine democracy and rule of law,” the stockholders said in their proposal. “Corporations and investors depend upon government services funded by tax revenues, including law enforcement, market regulation, judicial systems, infrastructure maintenance, public education, poverty alleviation, environmental protection, national defence and scientific research.

“These services cannot be funded by corporate philanthropy or a rise in share price.”

They also claimed that in 1952, 32 per cent of US federal tax revenues came from corporations and 9.7 per cent from people, but in 2012, folks were paying 40 per cent of taxes and companies were only contributing 8.9 per cent.

The investors want Google to commit to paying its “fair share”, avoid any transactions that would be difficult to justify if they became public and align its tax strategies with social and environmental sustainability as well as reputation and brand value.

Google said that it had already offered public support for tax reform, but it did not want its board to be forced to adopt a code of conduct.

“We continually consider the impact of our decisions and actions, including our tax positions, on our reputation and our brand,” the firm said. “We regularly evaluate our corporate structure, operations and tax positions in light of developments in tax law in all of the jurisdictions in which we are – or may become – subject to tax.

“Our board of directors believes that we have structured our operations in a manner consistent with all applicable tax laws and that we are thereby satisfying our fiduciary duties to our stockholders as well as our legal obligations in each of the countries in which we operate and conduct business. Accordingly, our board of directors has concluded that the stockholder proposal is not in the best interests of Google and its stockholders.”

Google paid just £11.2m in corporation tax in 2012, mostly by (legally) funnelling billions of pounds in revenue to its European HQ in Ireland. The firm claimed pre-tax profits of £36.8m in Blighty on turnover of £506m for the year.

But across the water in Ireland, revenue leaped up by 25 per cent year on year to £12.9bn, most of which went straight back out again in “admin expenses” of £9bn, including royalties to the tax haven of Bermuda where another firm holds Google’s intellectual property. The multinational ended up paying just £13.9m in tax in the Emerald Isle. ®

Providing a secure and efficient Helpdesk

More from The Register

next story
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
'Cowardly, venomous trolls' threatened with TWO-YEAR sentences for menacing posts
UK government: 'Taking a stand against a baying cyber-mob'
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Zippy one-liners, broken promises: Doctor Who on the Orient Express
Series finally hits stride, but Clara's U-turn is baffling
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
Apple SILENCES Bose, YANKS headphones from stores
The, er, Beats go on after noise-cancelling spat
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.