Google set to pay more tax abroad

Google set to pay more tax abroad
Google headquarter in Mountain View, California.

Google said on Thursday that it was in favour of an international agreement requiring multinationals to pay more tax in the countries where their turnover was generated, rather than in their country of origin.

"We support moves for a new international arrangement and mechanism for governing the way in which multinationals are taxed," wrote Karan Bhatia, a senior official of Google.

"The tax on companies is an important way for them to make their contribution to the countries and communities in which they do business, and we would like to see a tax environment that people consider reasonable and appropriate," he added.

The G20 countries are meeting this weekend in Japan. Several of their finance ministers met at the beginning of June to lay the foundations for an agreement on how the Internet giants would be taxed.

France, in spite of opposition from the US, intends to implement its own Gafa tax (acronym of Google, Amazon, Facebook and Apple) to tax activities on the Internet that "create value thanks to French web surfers."

Google emphasised that such a trend in taxation would mean Silicon Valley giants would pay less tax in the United States and more elsewhere. Its rates of taxation have been about 23% on average over the last decade, mainly in the US and on-line along with 23.7% of OCDE countries.

"We are not alone in paying the major part of our company tax in our country of origin," Karan Bhatia noted.

But without an international agreement on the matter, he considered, "countries would be able to impose discriminatory taxes unilaterally on foreign companies in various sectors."

"We can effectively already see this type of problem in some of the proposals that have been made," the Google executive continued. That "would raise new commercial barriers, slow international investment and harm economic growth."

The Brussels Times

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