The fact that the methods are legal hasn't stopped resentment brewing among governments, other brick-and-mortar businesses, and households feeling ever higher tax burdens.
The British Parliament's public accounts committee said Amazon, by accounting for the profits made in the U.K. elsewhere in the EU, paid 1.8 million pounds ($2.9 million) in British tax in 2011, on revenue of 207 million pounds. In Italy, the government said tax police determined Google had undeclared earnings of €240 million ($311 million) from 2002-2006 and had not paid value added tax of €96 million in the period.
Philippe Marini, the French senator who leads the country's finance commission, estimated France is missing out on some €1.3 billion in taxes from Google, Apple, Facebook, and Amazon. And, Marini noted, that amount would pale in comparison to what they likely owe Germany and Britain where sales figures are even higher.
"A bakery across the street is easier to control," Marini said. "And households can't relocate to Ireland just like that."
The companies say they comply with the law and are cooperative in countries where they operate, but do not elaborate. Even people critical of their tactics say ultimately the job of an accountant is to keep a client's tax bill as low as possible. The companies also stress that they do pay some taxes — contributions to their employees' social security, for example.
France, however, is going after the tech companies aggressively: On June 30, tax authorities raided Google's Paris offices, according to court documents posted online after Google contested the seizure of its files. The tech giant has denied receiving a €1.7 billion bill from the French government and says it pays all legally required taxes.
Taxes fall under French privacy law, so specific amounts are not made public. But the raid on Google's Paris offices is a sign the French government believes the tech company has more than just incidental support staff in the French capital. France's budget minister, Jerome Cahuzac, said "a certain search engine needs to regularize its situation in France".
Facebook, Amazon, and Apple have come under similar French scrutiny, according to published reports and public filings. Marini said French law is lagging behind, but hopes to catch up. Tech companies differ from, say, a grocery store in that their product is stored on servers and not on a shelf. And unlike a family, the companies can essentially locate — and re-locate — anywhere.
Both Amazon and Google are contesting the French actions, though Cahuzac said he's confident the government will win in court.
Britain and Germany have joined France in aggressively targeting the tech giants and, officials say, are coordinating against what one official calls "stateless income."
