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Income Tax tribunal asks Google India to pay taxes on Rs 1457 crore remitted to Google Ireland

Google India will be required to pay up back taxes on Rs 1,457 crore remitted by Google India to Google Ireland Limited (GIL) between 2007-08 and 2012-13, according to a ruling from the Bangalore bench of the Income Tax Appellate Tribunal. This pertains to Google Adwords, Google's flagship and core advertising service, and the sale of advertising in India, and the deduction of tax at source. Google Ireland is at the centre of an alleged global tax-avoidance structure for the company (more on that here), and others do this too. This report last year details how Apple paid only 0.005% tax, and this details how Microsoft avoids tax. All this, by routing sales through tax havens. In fact, earlier this year, in July, Google France narrowly avoided having to pay back taxes on $1.28 billion, after a Paris court ruled that since Google doesn't have a permanent office in the country it couldn't be fined. The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) dismissed all six appeals made by Google India and has ruled that it is "clear and conspicuous that they [Google India and Google Ireland] wanted to avoid the payment of taxes in India." The tribunal says that Google India failed to deduct tax at the time of remitting payment to Google Ireland, saying that: "This is a clear design to skip the liability by both the assessee as well as Google Ireland Limited by having mutual understanding. Therefore in our view... the assessee deliberately not sought permission for making…

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