Google board rejects shareholder proposal that it pays its "fair share of taxes"

Google's board of directors has recommended shareholders vote against a proposal that it commit to pay its fair share of taxes and consider the impact of its tax strategies on reputation and brand value.

Google: shareholder concern over tax strategy
Google: shareholder concern over tax strategy

The proposal will be voted on at the technology company’s annual shareholder meeting today at 2pm in California (9pm UK time).

It has been put forward by a group of shareholders in Google led by the Domini Social Equity Fund. The group includes the Missionary Oblates of Mary Immaculate, NEI Investments, Robert Burnett and Investor Voice.

It recommends Google adopt a set of principles "to address the impact of its tax strategies on society, with particular focus on Google’s employees, customers and suppliers" and publish annual updates on their implementation from December.

Google’s board of directors has recommended shareholders vote against the proposal because it "is not in the best interests of Google and its stockholders".

The company said has already offered its public support for the idea of tax reform at a national and international level, quoting an opinion piece by its chairman Eric Schmidt in the Financial Times in June 2013.

In the piece, Schmidt writes: "Today’s tax rules are fiendishly complicated, and everyone would benefit from a simpler, more transparent system... International forums are precisely the places to decide on these kinds of highly complex, interconnected issues."

Google’s statement continues: "We continually consider the impact of our decisions and actions, including our tax positions, on our reputation and our brand… Our board of directors believes that we have structured our operations in a manner consistent with all applicable tax laws and we are thereby satisfying our fiduciary duties to our stockholders as well as our legal obligations in each of the countries in which we operate and conduct business."

 

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