Israeli Authorities Examine Google's Tax Strategy

Similar investigations of the Internet search giant’s parent company are underway in Europe.

Google Israel’s tax strategy is being examined by the Tax Authority in the wake of similar investigations of the Internet search giant’s parent company that are underway in Europe.

For now, the tax authority isn’t conducting a criminal investigation. Nor, as far as it is known, is the authority examining the activities of Facebook in Israel despite their similarity to Google’s.

The revenues of Google Israel from advertising are estimated at NIS 500 million a year, and the company employs about 350 people at its development centers in Haifa and Tel Aviv.

But Facebook, with estimated revenues in Israel exceeding NIS 100 million, doesn’t have any staff in the country and operates in the Israeli market through offices in Ireland,.

“We are continuing to cooperate with the Israel Tax Authority on every question it has,” Google Israel’s spokesman said on Thursday. “Google is in compliance with all the tax laws in all the countries in which we operate, including in Israel.”

On Wednesday, Britain, France and Germany called for stricter rules to stop companies such as Google, Apple and Amazon aggressively avoiding taxes in austerity-bitten Europe.

French authorities raided Google in a 2011 investigation into whether its Paris office conducts sales work. The company was asked to pay 1.7 billion euros in back taxes. A similar issue has arisen with how Google operates in Britain, with questions raised about whether its sales staff are based abroad, as the company maintains, or in the country, which would create a liability to U.K. tax.

Reuters