Thursday, March 31, 2011

Google Linked To (Alleged) Tax Violations In China

It’s a good bet that Googlers who believed the corporation should leave China are now saying “I told you so” to those who argued it should stay.  Today, there’s word of yet another problem in the country, as three local companies owned by Google have been accused of violating tax laws.

Indeed, according to a report that appeared in the Economic Times (a state-run newspaper), the companies have in fact been found guilty of violating laws and penalized for it.  “Tax authorities have recovered the funds and collected fines,” according to Owen Fletcher, who’s based in Beijing and saw the original claims.

More investigations are supposed to be taking place, though, and it looks like the claims don’t just revolve around a simple miscalculation or two.

For starters: over $6.1 million is supposedly at stake.  Also, Fletcher wrote, “The problems at the ‘Google enterprises in China’ included using fake receipts and reporting unrelated spending as costs, such as for massages.”

Those allegations could damage Google’s reputation even if they’re proven untrue.  It’s no secret that random claims can hurt corporations, and Google’s stance on censorship has already put it in a controversial position.

Anyway, this counts as the latest in a long string of incidents indicating that Google isn’t too welcome in China.  Other recent problems for the company include Gmail accessibility issues and the loss of a partnership with Sina.

It should be interesting if Larry Page adopts a new approach to China when he replaces Eric Schmidt as Google’s CEO next month.

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