Original URL: http://www.theregister.co.uk/2012/11/05/mozilla_pays_1_5_million_dollars/

Mozilla gets away with $1.5m tax bill in Googlebucks settlement

Taxmen let browser bods off easy: They had $15m ready

By Kelly Fiveash

Posted in Financial News, 5th November 2012 16:43 GMT

Firefox maker Mozilla will cough up $1.5m after it came under scrutiny for insisting it shouldn't pay tax on the vast revenue it gets from Google.

The non-profit organisation had argued that the search engine's contributions are royalties and therefore non-taxable.

But on Saturday, Mitchell Baker - who is chairman of the Mozilla Foundation - confirmed US taxmen have concluded their audit, which kicked off in 2008, and that the browser biz has offered the seven-figure sum as a settlement.

She wrote:

As a result of this settlement, $15m in funds we had held in reserve pending the resolution of the audit are now available to support the Mozilla Foundation’s mission to support innovation and opportunity on the web.

I believe this to be a very positive result. We will now go back through the various documents and will have more details on this audit to share in the future. I expect to do so before the end of this year.

The outfit's revenues in 2007 reached $77m, of which $66m was creamed from Mozilla's agreement with Google to make the search engine the default system offered by Moz's web browser to users.

Mozilla won tax-exempt status in 2003. By 2005 the foundation spun off a for-profit operation in the form of the Mozilla Corporation. By the end of 2007 it had also stacked up a reserve pile of cash of nearly $15m in case the taxmen came knocking at its door.

The non-profit org had previously argued that its search revenues from Google were royalties and so should not have been taxed.

In late 2011, Mozilla extended its revenue deal with Google for another three years, following some will-they-won't-they speculation about the future of that "sweethearts" partnership. ®