Google Tax Taxation example

Haven't found the essay you need?

We can write it for you. On time. 100% original.

Order Now
Text Preview

Google Tax Taxation

Google TaxTaxation has always been a debatable issue. From one point of view, taxes are considered vital in any economic sphere because they provide countries with necessary funds. From the other side, each and every company tries to decrease the amount of sums that are to be paid as taxes at all hazards. When it comes to small or medium-sized businesses, there is usually not that complicated to calculate the rate of taxes, especially when those businesses are located in the certain countries and operate within specified territories. All the goods are sold in the specified region. Therefore, the tax rates are calculated on the basis of business activity on the concrete area. However, this situation has nothing in common with global giants that operate throughout the planet.

They have an opportunity to schedule the cash flows and conduct money transfers in the way that provides them with opportunity simply to “choose” the country where corporate tax will be paid. Definitely, this tax is paid in the countries with comfortable tax rates. For instance, the enterprise can operate mostly in the UK, but pay the corporate tax in Ireland, where the tax rates are much lower. This situation is considered the tremendous pitfall on the way to successful worldwide integration. As an example, Bowers (2016) gives the information about Google. He argues this company made £17 billion sales from the UK clients from 2005 to 2013. Despite that fact, the company paid just £52 million as a corporate tax. This situation was the reason for the revision of taxation system in the UK and resulted in the implementation of diverted tax, also known as “Google tax”. It came into force in April 2015 with the rate of tax 25 percent. The key goal of this tax is to stop the global companies from shifting their profits to other countries and force them to pay 25 percent tax calculated on the basis of sales made in the UK. Another aim is to fix the problem of stock-market groups of companies that are supposed to update the information about their performance for the shareholders while the possibility of profit shifting may result in presenting the incorrect data.

At the same time, Hope and Hughes (2016) argue that the diverted tax does not relate to all the companies without exception, but only to those that evade corporate taxes in the UK. Google is not the only company that will have to deal with this tax in the UK. Seemingly, Amazon, Starbucks, and other global corporations that operate in the United Kingdom will also deal with 25 percent of the tax rate. At the same time, it is not completely obvious whether this tax will help definitely fix the situation. BBC’s economics editor Robert Peston (2014) claims that the economy in the UK is driven precisely by the global giants, therefore, in case, the taxation system hits to much – the economy of the …

Download Full Essay Show full preview


Examples provided by Homework Lab are intended for the motivation and research purposes only. Do not submit any paper as your own piece of work. Every essay example belongs to students, who hold the copyright for the written content. Please, mind that the samples have been submitted to the Turnitin before and may show plagiarism in case of the repeated submission. Homework Lab does not bear any responsibility for the unauthorized submission of the examples.