Putin's New Internet Czar Wants Apple and Google to Pay More Taxes...

by Ilya Khrennikov  Stepan Kravchenko
February 8, 2016 — 8:00 PM CST Updated on February 9, 2016 — 9:07 AM CST
Bloomberg

• We are breeding the cow and they are milking it': Klimenko
• Google's reach considered national security threat to Russia

When he’s not checking Gmail on his MacBook, Vladimir Putin’s new Internet czar can’t stop railing against American technology companies.

Google, Apple Inc. and Microsoft Corp., collectively worth more than Russia’s gross domestic product, have all entered German Klimenko’s crosshairs since he was named Putin’s first Internet adviser six weeks ago.

In a 90-minute interview peppered with expletives, Klimenko said forcing Google and Apple to pay more taxes and banning Microsoft Windows from government computers are necessary measures best explained in terms of barnyard economics and marital infidelity.

“We are breeding the cow and they are milking it,” Klimenko, who hasn’t had time to move into his Kremlin office, said in Moscow at the headquarters of his Internet group, which includes blog-hosting and statistics services.

Klimenko, 49, is pushing to raise taxes on U.S. companies to help level the playing field for Russian competitors such as Yandex and Mail.ru. His efforts mirror those of governments across Europe and beyond to squeeze more revenue out of Google, Apple and other multinationals with increasingly complex billing and ownership structures.

Accused Assassin 
The Putin adviser already has an ally in parliament: Andrey Lugovoi, one of two former KGB officers accused by a U.K. judge of assassinating former agent Alexander Litvinenko, a vocal Putin critic, in London in 2006.

Lugovoi, who became a lawmaker after Litvinenko’s poisoning and denies wrongdoing, is sponsoring a bill that would apply an 18 percent value-added tax to as much as 300 billion rubles ($3.9 billion) of revenue that Google, Apple and other foreign companies earn each year.
The bill lists a dozen categories of digital products and services on which domestic companies currently pay VAT but foreigners for the most part don’t, including ads, games, movies, marketplace transactions and cloud computing.

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