LONDON May 3 Some of Google's clients have
questioned its assertion that it does not sell to customers from
its London office, a key plank in its ability to operate almost
tax-free in Britain, a poll said on Friday.
The Drum, a magazine for marketing professionals, asked 80
ad buyers and digital agencies -- companies which purchase
advertising products on behalf of clients -- about their
dealings with Google's London office and their interaction with
the office in Dublin.
Of the 29 which replied to survey, "Almost 80 per cent of
respondents said they dealt with London when buying Google
advertising. Around 14 per cent said they used Dublin, the
remainder said they did not know," an article posted on The
Drum's website said.
Google Inc says it sells all adverting in the UK,
France and Germany from its Dublin office. It declined to
comment on Friday on the details of the survey.
Corporate tax avoidance has become a hot political issue in
Britain amid austerity measures to pay for the banking crisis.
British Prime Minister David Cameron has said he is working
to address the problem and plans to put it on the agenda for the
G8 meeting of the world's largest economies to be held in
Northern Ireland in June.
From 2006 to 2011, Google generated $18 billion in revenues
from the UK, according to statutory filings, and Google UK paid
just $16 million in taxes, its accounts show.
"When asked what they considered they were doing when
dealing with Google's London team, 76 per cent said they
considered they were buying from them. 17 per cent said they
were receiving general advice in order to buy through Dublin,"
the Drum report added.
When asked what they considered to be the primary role of
Google's London advertising team, 80 percent said "sales", while
17 percent said "support", the report said.
Earlier this week British lawmakers said they planned to
call Google back to testify to a parliamentary committee after
Reuters revealed the company advertised for UK staff to
"negotiate" and "close" deals, despite a Google executive
telling the committee in November that UK staff did not sell to
The profiles of around 150 London-based employees on the
LinkedIn networking website said they were involved in
formulating sales strategy, managing sales teams, closing deals
or other sales work.
Google has denied misleading lawmakers and said it complied
with UK tax law. Google says it employs around 1,000
London-based "digital consultants" who educate customers about
the benefit of Google products.
It said these people did "encourage" clients to buy but said
all selling was done by "a couple of hundred" staff in Dublin.
The company declined to say specifically how the process of
selling was divided between Dublin and London or whether this
involved London staff negotiating contracts which were then
rubber-stamped by Dublin.
It said: "We accept that the wording of some job adverts may
have been confusing and we are working to make it clearer."
Under international tax law, companies are allowed to engage
in promotional work in a country without creating a tax
residence but lawyers and academics said negotiating on British
soil could mean Google's UK revenues became assessable for
income UK tax purposes.
Currently, Google UK receives fees from Google Ireland that
are intended to cover Google UK's costs, plus a small premium.