Feeds

Activist investors try forcing Google to pay more taxes

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

The essential guide to IT transformation

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. ®

5 things you didn’t know about cloud backup

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Banking apps: Handy, can grab all your money... and RIDDLED with coding flaws
Yep, that one place you'd hoped you wouldn't find 'em
TROLL SLAYER Google grabs $1.3 MEEELLION in patent counter-suit
Chocolate Factory hits back at firm for suing customers
Primetime precrime? Minority Report TV series 'being developed'
I have to know. I have to find out what happened to my life
Netflix swallows yet another bitter pill, inks peering deal with TWC
Net neutrality crusader once again pays up for priority access
prev story

Whitepapers

Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Backing up distributed data
Eliminating the redundant use of bandwidth and storage capacity and application consolidation in the modern data center.
The essential guide to IT transformation
ServiceNow discusses three IT transformations that can help CIOs automate IT services to transform IT and the enterprise
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.