[DanBC]

> So why should the mere existence of servers in the U.K. entitle the country to tax some substantial amount of Google's income?

This is wrong.

UK customers buy ads to be shown in the UK to UK viewers, from UK staff at Google's UK offices. They pay in UK pound sterling, from UK bank accounts. So far everything is in the UK. It is only at the very end of the process that someone in Google's Ireland office pushes a button to close the sale, thus taking the sale out of the UK (and our tax system) and into Ireland and their tax system.

This is a transparent dodge to avoid paying tax. It might be legal, but it's sleazy.

> but not any specifics about exactly what those loopholes are.

You don't know what you're talking about, which is fine, but why go to all that effort to create scenarios that aren't happening rather than just asking what is happening?

[rayiner]

> K customers buy ads to be shown in the UK to UK viewers, from UK staff at Google's UK offices. They pay in UK pound sterling, from UK bank accounts. So far everything is in the UK. It is only at the very end of the process that someone in Google's Ireland office pushes a button to close the sale, thus taking the sale out of the UK (and our tax system) and into Ireland and their tax system.

Except, arguably, the most important thing: the search algorithm and database that brings those UK customers to view those ads in the first place.

In any case, my point isn't that what Google is doing is the right answer. My point is that its quite debatable even from our armchairs how much tax revenue the UK is entitled to from Google's activities in the country. Google is just taking advantage of that complexity.

[DanBC]

Well, if you're tying tax to the algorithm then all the money should go back to the mothership. I have no idea what the rates of tax in Ireland vs California are.

It's not that debatable - we'll see unified tax codes across the EU. Some companies (not just Google) pushed things too far and set up weird schemes that exist only to reduce tax to a minimum.

> Google is just taking advantage of that complexity.

"Taking advantage of" also has negative connotations. Exploiting.