Is something rotten in Denmark? The Scandinavian country on Europe’s mainland looks to be conducting an internal analysis of the taxes that it gets from Google, a top multinational tech firm with an outsized portion of market cap in America’s equities market.
Coincidentally, maybe, American officials are looking at Google and other top tech firms right now for antitrust behavior and possible tax evasion.
However, it’s in Europe that some of these giants are getting dinged by assertive tax analysts who are suggesting these companies are paying their fair share.
Denmark is reviewing several tax years to look at Google’s tax position, according to U.S. News reports and others in this morning’s finance sector.
All of this doesn’t come entirely out of the blue – weeks ago, we reported on Ireland’s revisiting of the taxes that Apple pays in that country. At the time, it was suggested that Ireland is one of a number of tax havens for U.S. companies trying to hide massive profits in order to avoid paying Uncle Sam domestically.
Furthermore, a study in December by British party Fair Tax Mark showed that Google, Apple and other FAANG companies based in the United States were likely to be underpaying on their profits internationally.
“The research, published Monday, analyzed their 10-K filings, which are financial forms submitted by businesses to the U.S. government,” wrote Chloe Taylor at CNBC Dec. 2.
“(the study) looked at tax provisions — the amount companies set aside in their financial reports to pay taxes — and compared those to the amounts that were actually handed over to the government, referred to as cash taxes. Over the decade, the gap between the Silicon Six’s provisions and the taxes they actually paid reached $100.2 billion, researchers found.”
Strangely enough, Google’s repeated response to these critiques is that it pays 80% of its taxes in the U.S.
However, if it’s not paying its fair share in the U.S., it doesn’t matter what percentage it pays domestically, and what percentage it pays abroad.
This past January, Google agreed to stop using a “licensing scheme” involving Bermuda and a Dutch holding company. That’s just one of the tangible markers used by observers like Fair Tax Mark to suggest that these companies really should be paying more. Look for continued fallout in the tech sector.