14 DAY TRIAL // When I first read about it, I looked at the IM window that had popped up with the surprising announcement in disbelief and partly amused. I mean? Google? No way, Jose! They've played the game way too safe this far to be blowing it like this.
But much to my surprise, it turned out to be true, after an anonymous tip the Chinese authorities have started investigating Google for tax evasion or more specifically evasion of business and personal tax and tax on employee options. It was one of those OMG moments, really. The eye-popping-out cartoony style of OMG moment to be honest.
Some of the investigations relates to the way Google has treated transactions from Chinese customers to its US head office in the past. Duncan Riley of TechCrunch.com reports that "Between 2000 and 2003 Google offered Adwords services to Chinese citizens that did no go via the local subsidiary, resulting in no local records from which authorities can check for tax avoidance. A further allegation suggests that domestic customers until 2007 could use agents to place Adwords ads, avoiding a formal invoice and auditable paper trail, possibly in breach of Chinese tax law."
It seems that Google is not the only one to be gazed upon by the watchful eye of the Chinese Justice, Sina.com confirmed that the investigation could further widen to include other online companies operating within the Chinese borders. These companies include Taobao, Baidu and Yahoo!.
The news comes as a rather unfortunate time, right on the heels of Cisco executives in Brazil that were arrested a couple of weeks ago for tax issues that were discovered by the local authorities.
I'm not sure anyone could have seen this coming, not with the current expansion of Google in the colonial manner: "I claim the mobile/geographical/policies/and many more domains here for myself!"