The EU’s competition commissioner said Thursday she was prepared to investigate Google’s tax deal with Britain as the US Internet giant insisted it complied with all taxation laws.
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On Wednesday, Margrethe Vestager, the European Competition Commissioner, said she would investigate Google’s tax arrangements if someone complained about them.
The SNP’s economy spokesman, Stewart Hosie, says he has sent her a letter calling for an investigation and it is understood Labour will too.
Italy has brought several cases against global technology companies that have headquarters in low-tax nations like Ireland to avoid paying higher taxes in other countries, like Italy.
“After a six-year audit we are paying the full amount of tax that HM Revenue & Customs (HMRC) agrees we should pay, including 130 million pounds in additional back tax”, Peter Barron, Google’s vice president for communications and public affairs, said in a letter to the Financial Times.
The furore from the public and the increased media scrutiny comes shortly after the UK’s Chancellor of the Exchequer hailed a tax deal with Google, which will see it pay £130 million in back-dated taxes for the past 10 years.
“What should Google pay in the UK?”
Google appeared before the committee in November, defending the worldwide corporate structures it employed to reduce its tax liabilities.
The developments came as the European Commission announced a new drive to align tax laws in all 28 member states, to help in the fight against aggressive avoidance by large companies.
Google has previously experienced a bruising encounter with the PAC over accusations it misled the government about its tax payments.
David Cameron blames Labour for the bill, telling MPs at Prime Minister’s Questions: “We’re talking about tax that should have been collected under a Labour government, raised by a Conservative government”.
He praised Google’s £130million tax settlement to cover a five year period to 2011, but added that he hoped the company would pay more tax in the future.
She said: “This bad deal is very bad news for everybody because it shows that the United Kingdom prepares itself to become a kind of a tax haven to attract the multinationals”.
The Italian claim against Google also follows an agreement the country’s tax authority reached at the end of December with Apple Inc. over a dispute in which the US company was accused of underpaying tax, in one of the biggest tax settlements in the country.
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“Diverted profits tax is only there to capture tax from those organisations that don’t pay corporation tax on their profits in the UK”.
