Google tax amount outside the US doubles to $771 mn

14 February 2014

Google tax amount outside the US doubles to $771 mnAfter a controversy over its offshore tax avoidance, Google has doubled the amount of tax it paid outside the US last year.

The company paid $771 million by way of non-US corporation tax on foreign profits of $8.67 billion equivalent to a rate of 8.9 per cent, which was low compared to typical UK companies.

However, that was more than double a year earlier, of the $358 million in overseas tax or 4.4 per cent on profits of $8.08 billion. Its foreign tax rate was even lower, at 3.2 per cent, in 2011.

Google's annual report offered no explanation on why its foreign tax bill increased. It also did not give a country-wise breakdown.

Google came under pressure to pay more tax after the Commons Public Accounts Committee's chairman Margaret Hodge termed  it "evil" for the measly amount it paid by way of Corporation Tax in the UK which was its biggest market after the US (See: UK lawmakers demand comprehensive inquiry into Google's tax practices) 

The search giant's most recent annual UK corporation tax bill was only 11.2 million, despite its UK turnover running at 3.5 billion a year, or 10 per cent of its worldwide revenues.

Meanwhile, the internet giant said its UK sales hit $5.64 billion in 2013, an increase of over 16 per cent on the previous year, its lowest growth rate in three years.

The UK is Google's biggest overseas market and the only one for which it gives separate sales figures. In recent years the discrepancy between the company's high UK revenues and low tax bill had come in for criticism from politicians.

The company's annual report filed on Wednesday showed UK sales growth declining from 20 per cent in 2012 and 22 per cent in 2011.

The growth of Google's US sales also slowed in 2013, rising only 14 per cent, as against 34 per cent in 2012.

The Mountain View, California-based company notched up a forecast-beating fourth quarter global revenue last month, even rates for its online ads declined.

Google is set to publish its UK tax bill in a separate UK filing later in the year.

In 2012, the company had a tax bill of 35 million which included a 24 million charge in relation to previous years, on sales of 2.94 billion to UK customers.

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