The president of Google Brasil, Fbio Coelho, has sent a letter to Brazil’s communications minister Paulo Bernardo responding to the minister’s recent comments that the company may be treating countries like Brazil as “tax havens” by not paying all due taxes.
In the letter, released on Saturday (Mar 8) to the press, Coelho said that Google Brasil collected 733mn reais (US$318mn) in taxes last year.
“All of Google Brasil’s sales transactions are billed locally, based on information available to [Brazil's federal tax office] Receita Federal under the obligations in force today,” says the letter.
“All the information concerning the collection of these taxes are duly registered with the appropriate authorities at the federal, state and municipal levels, as required by Brazilian law,” he added in the letter.
Bernardo has said in recent interviews that some services from over-the-top (OTT) companies such as Google, Facebook and Netflix are mostly paid by users in Brazil with international credit cards, and, therefore, would have taxes collected in the US, where Google Incorporated (Nasdaq: GOOG) is registered.
Questioned by journalists during Mobile World Congress in Barcelona about the topic, the minister defended an investigation by Receita Federal to assess if there are any tax irregularities in the operation of OTTs in Brazil.
Bernardo has lashed out against what he calls an asymmetric tax situation, saying it would be unfair for firms providing online and digital services in the country to be subject to more taxes than others.
“We need to have transparency and equal market conditions. If someone sells a product online and does not pay all the taxes due in the country, it is evident that all the others who are paying accordingly are being harmed,” he said at the time.
In his letter, Coelho said that, confronted with similar questioning in the past year, Google Brasil opened up its tax records and went public to disclose the amount collected in Brazil – 540mn reais – during 2012.