Turkey fines Google for violating tax laws

Turkish authorities are fining Google a total of 71 million Turkish Lira (USD $47 million) for allegedly dodging taxes. A Turkish lawyer says this claim is valid.

The fines, according to TechCrunch, come after a year-long investigation. Turkish media say the government insists it is due additional taxes. The government reasons Google operates its online advertising in the country and even boasts offices and a registered subsidiary there while bills and payments originate from Ireland. Google’s European headquarters are located in Ireland’s capital and much of the company’s support and financial services are centralized there. Turkish officials argue Google is required to pay national taxes for revenue generated through its registered company based in Turkey. Furthermore, they say an extensive audit shows that the American company owes the government nearly $50 million in unpaid taxes. Google disagrees. The company states it runs its ad network operations from Ireland and thus is not obliged to pay taxes in Turkey merely because it owns a subsidiary there. Google has issued a statement saying it is acting in accordance with the tax laws of every country in which it operates, including Turkish laws, and that its negotiations with the government on this issue are ongoing. A Turkish lawyer, contacted by TechCrunch, said the government is making a valid claim. The lawyer indicated Google has set up a full-fledged company called Google Reklamcılık ve Pazarlama Ltd. Şti. (which means Google Advertising and Marketing Ltd.) in Turkey rather than what he refers to as a ‘liaison’ branch. If Google had chosen to take the latter course, it would have had to pay very little or no taxes at all.