Google, Tax and Cloud Computing

I took my four year old daughter to the Science Museum in London this weekend. One exhibit is a “Web Lab” hosted by Google where my daughter was able to look through goggles to see a live image of a Parisian bakery or South African aquarium. 

All the time though I was thinking about the tiny contribution Google makes to the UK economy in tax (http://www.bbc.co.uk/news/business-20288077) and the stories circling about “tax avoidance” by such companies.

Cloud Computing is about moving activity around the globe, allowing organisations to transfer virtualised computing instances around to capitalise on efficiencies … and presumably one of these efficiencies will be tax-advantage.  While debates on cloud centre on legislative and security implications of the location of cloud services, I anticipate the future will include cloud services specifically constructed to allow companies to transfer activity into tax-havens. Any company which can legitimately consider the processing of information as a cost must surely be considering whether the processing of this information in a tax-haven will allow them to write these costs off against tax.

While the Google web-labs were pretty interesting, it was ironic that it could only exist within a museum which itself is mostly tax-payer funded.

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