Google is being investigated for tax evasion by the Chinese Inland Revenue Department following a tip off from an “informant” alleging wrong doing.
According to local reports, the investigation into Google includes evasion of business and personal tax, and tax on employee options.
At least some of the investigation relates to how Google has previously treated transactions from Chinese customers to its US head office. Between 2000 and 2003 Google offered Adwords services to Chinese citizens that did no go via the local subsidiary, resulting in no local records from which authorities can check for tax avoidance. A further allegation suggests that domestic customers until 2007 could use agents to place Adwords ads, avoiding a formal invoice and auditable paper trail, possibly in breach of Chinese tax law.
Sina.com (in Chinese) received some sort of confirmation from the Chinese tax authorities that the investigation was underway, and went on to say that the investigation could widen to include other online companies operating in China, including Taobao, Baidu and Yahoo.
Thanks to Billsdue for the tip
Hmmm, this comes on the heels of Cisco executives in Brazil being arrested a couple of weeks ago for TAX issues…..
It’s really hard to define when it comes to the online revenue.. it’s already cumbersome to declare tax in my country as my income source are online..
I’m sure Google’s lawyers will be strong enough to handle this one
Oh how I love this!
First they work as agents for the communist in tracking down and killing dissedents, now they are targets! lol
I guess google isn’t Mother Theresa when it comes to Taxes.
Google has been in the middle of a love hate relationship with operating here in China. they no doubt have a number of lessons left to learn, and I think one of them is not to scare the competition as more often than not it is the competition in China that will provide a “tip” or suggest that a IP address come under review. Yahoo, MSN, Facebook, and dozens of Chinese sites have all gone through some of the same issues, and I would say that for many, they will just have to bear through some of it… while keeping sound books that are to code
Just another reason why playing by the rules is so key here. The tip is only a problem if one’s house is not in order, and while I am sure Google has enough lawyers to provide a defense, it will really come down to whether or not their accounting firm did their job in closing the books properly.
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http://www.allr...leadtochina.com
Google just got nabbed in Sweden and Norway for operating out of Ireland to evade tax.
I wrote a post on this over at http://www.TheChinaGame.com. This is far more likely about channel conflict in China. What most don’t realize is the extent to which Google has made use of resellers in the country. It’s actually a common issue.
It’s how the EU and Chinese compete with big foreign companies, but with lawsuits!
this is personal … China hates google! Not that google is some angel, but China is
Another great reason to do business in China – unfortunately we can’t avoid doing business in emerging markets.
Shall I recount the story of a client who leased spaces in Beijing, improved the property, hired local talent, got some great work down and was then locked out over some local municipal baloney? When they straightened it out, their servers and code workstations were…….da da da …..wiped.
SUM TIN WONG…..
Uh, isn’t Google search not even allowed in China anymore?
(http://news.bbc...ogy/2231101.stm)
do i smell ENRON?
I will reserve judgement on this story until I get confirmation from another source I trust such as Danwei.
I hope Techcrunch has learnt its lesson from the last time it ran a Google in China story saying that it was being blocked when this was not actually the case. I am sending this message from Shanghai where I have lived for 3 years. I suggest you appoint a local part time contributor to send you stories about China to complement your strengths in covering US based developments.
Josh, I’m pretty sure that was only for a couple hours. The day they released those stories I used Google in the morning and the evening.
didn’t google offer china a version of google for them?
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