Google overseas tax bill rises as UK sales hit $5.6 billion

LONDON Thu Feb 13, 2014 8:37pm IST

An illustration picture shows a Google logo with two one Euro coins, taken in Munich January 15, 2013. REUTERS/Michael Dalder/Files

An illustration picture shows a Google logo with two one Euro coins, taken in Munich January 15, 2013.

Credit: Reuters/Michael Dalder/Files

Related Topics

Stocks

   

LONDON (Reuters) - Google (GOOG.O) said its overseas tax bill rose sharply in 2013, while sales in Britain, its biggest foreign market, hit a record $5.64 billion.

Google said in its 10-K annual report filed on Wednesday that its overseas tax charge, including deferred taxes, was $743 million in 2013.

While this was up from $432 million for 2012, its tax rate on foreign earnings was just 8.6 percent in 2013 -- around a third the headline rate in its main non-U.S. markets.

A spokesman declined comment but Google previously said it complies with the tax rules of all the countries in which it operates.

Google earned 60 percent of its profits outside the United States last year, even though foreign sales were just 55 percent of revenues.

Britain is the only market for which Google breaks out separate sales figures. In recent years the discrepancy between the company's high UK revenues and low tax bill have prompted criticism from politicians.

The Mountain View, California-based company reduces its non-U.S. tax bill by having customers across Europe transact directly with an Irish subsidiary which minimises its taxable profit by paying royalty fees to an affiliate in Bermuda, where there is no corporate income tax.

However, in recent years Google's effective tax rate on non-U.S. earnings has inched up.

Last year's 8.6 percent rate was up from 5.3 percent in 2012. In the previous four years, the rate oscillated between 2 and 3 percent.

Google declined to say why its tax rate was rising outside the United States but the company's increasing sales in emerging markets could be a factor.

Nikesh Arora, Google's president for Global Sales Operations said last month the group enjoyed "particularly strong growth in Asia Pacific" last year.

Tax campaigner John Christensen of the Tax Justice Network, Pacific noted that tax authorities in some Asian countries have a tougher reputation in relation to tax avoidance than European countries.

Google publishes its British tax bill in a separate UK filing later in the year. In 2012, the company had a tax bill of 35 million pounds, including a 24 million charge in relation to previous years, on sales of $4.9 billion to British customers.

Google's global revenue growth slowed last year, to 19 percent from 32 percent in 2012. The 16 percent rise in the company's UK sales compares to 20 percent growth in 2012 and 22 percent in 2011.

(Reporting by Tom Bergin; editing by Keiron Henderson)

FILED UNDER:

Sony Cyber Attack

REUTERS SHOWCASE

Forceful Conversions

Forceful Conversions

BJP distances itself from religious conversions.  Full Article 

Photo

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Economic Pulse

Economic Pulse

Crank up public spending to revive growth - chief economic adviser.  Full Article 

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

Down Under

Down Under

Magic Johnson inspires Australia to second test win.  Full Article 

Going International

Going International

Bollywood’s Priyanka Chopra sets sights on American TV.  Full Article 

India This Week

India This Week

Some of our best photos from this week.   Full Coverage 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device   Full Coverage