Google not paying taxes to Russian budget - Federation Council

The Google company, registered in the United States as a transnational Internet corporation, has avoiding paying taxes into the Russian budget for many years, head of the Russian Federation Council information policy committee, Senator Ruslan Gattarov said.

The Google company, registered in the United States as a transnational Internet corporation, has avoiding paying taxes into the Russian budget for many years, head of the Russian Federation Council information policy committee, Senator Ruslan Gattarov said.

"It concerns the company providing services in the framework of the paid electronic service Google FdSense. This is content advertising allowing web-site owners to receive income from posting advertisements on their websites. Visitors of websites follow advertisement links and this gives website owners the right to receive money from Google," Gattarov said.

Though the user agreement of the company is regulated by the U.S. law, this does not apply to taxes.

"Using its right, the company lifts from itself the responsibility to pay taxes to the Russian government and transfers this burden to the payment recipient in Russia, which directly contradicts the tax legislation existing in our country in terms of the demands on tax agents," he said.

Google is obliged to withhold taxes from a taxpayer and to pay this tax to the Russian budget itself without transferring this responsibility to other parties, Gattarov said.

"We have studied in great detail all available documents, including the user agreement, and can say that Google is violating Russian law in terms of the obligation to withhold income tax by tax agents and violators face a fine of 20% of unpaid taxes," Gattarov said.

Gattarov said that due to this he was asking the Russian Federal Tax Service head to hold inspections of known facts, including the inspection of Google activities in Russia, concerning payments to Russian citizens and not paying taxes from these payments.

"We are also asking to request from the company all the information on the amount of money paid to our citizens and on paying the income tax from the money. Besides this, it is also necessary to assess the legal mechanism in the Google user agreement," Gattarov said.

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