Does Google Pay All the Taxes It Should? (Hint: Not Really)

Does Google Pay All the Taxes It Should? (Hint: Not Really)

In this article, we delve into the question ‘does Google pay its taxes’ to unearth the truth behind the digital giant’s taxation history.

The controversy of tax avoidance has followed Google around for some years and, as they say, there’s no smoke without fire. In this article, we delve into the question ‘does Google pay its taxes’ to unearth the truth behind the digital giant’s taxation history.

How much tax did Google pay in 2019?

In terms of paying tax in the United Kingdom, Google paid just £44 million in corporation tax last year. That may sound like a lot, but remember that their total gross profit in 2019 was $89.96 billion and their reported UK profit was £225 million.

At the time of writing, UK corporation tax is 19% of company profits. So yes, Google has paid the required corporation tax in the UK, but nothing more. Despite their astonishing profits and being a multinational company, Google pays no more corporation tax in the UK than a small business.

Plus, although Google UK reported £1.6bn in revenue last year, it is thought that this doesn’t actually reflect how much it makes in total advertising revenues in the UK, as some are reported in other jurisdictions. In fact, the research company eMarketer estimates that, in reality, Google made about £5.7bn in ad revenue in the UK last year.

As part of a movement to request more taxes from multinational corporations, from April 2020, the UK government has introduced a new Digital Services Tax — this is a 2% tax on the revenues of search engines, social media platforms and online marketplaces which derive value from UK users. This means that Google will have to pay more tax for the 2020–2021 tax year (but only slightly more).

big-tech google tax-avoidance tax-reform big-data

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