Description: Google has settled a six year tax audit with the British government; the amount owing – 130 million British pounds. And Google faces a similar tax bill in Italy while the government of France threatens to collect about three times as much from the Internet search-engine king. But don’t feel too sorry for Google. Some calculate that even with this settlement in Britain, Google is paying a tax rate of about three percent there, due to its complex means of booking revenue in low tax locations.

Source: Globeandmail.com

Date: January 29, 2016

Link: http://www.theglobeandmail.com/report-on-business/rob-commentary/executive-insight/googles-uk-tax-avoidance-a-threat-to-its-success/article28435936/

Discussion Points:

1) What’s your personal feeling about Google’s tax avoidance strategies described in the article?

2) Do you agree with the article’s conclusion that because of public outcry,  “it is only a matter of time before the game of multinational tax avoidance . . . is banned?”

3) Would accounting theory have anything to tell us about where the revenue of Internet companies like Google and Facebook should be recorded?