Google has agreed to face United Kingdom lawmakers to answer questions about a recent tax settlement with the government there over which a growing number of people in the European Union have expressed outrage.
Advertisement
A month ago, Apple Inc (NASDAQ:AAPL) reached a settlement with Italian tax authorities to pay 318 million euros to clear accusations that it didn’t pay taxes earned for six years.
Google last week struck a deal with the United Kingdom that would cover back taxes and interest from the years 2005 to 2015.
Meanwhile Google defended its deal with the United Kingdom authorities.
“We’ve achieved this payment and now we want to see these companies pay more in future”.
The National Audit Office, the official value for money watchdog, is considering a call by Labour for a formal probe.
Mr Osborne said: “When I became Chancellor Google paid no tax”.
As the row escalated, a Number 10 source said: ‘My understanding is that the French and Italians have said how much tax they would like Google to pay.
Google, like most multinationals where operations span continents, does not reveal revenues for individual countries.
“But companies can and have found ways around paying taxation and we have made a lot of changes to the taxation system that actually will make them pay more over years to come”.
On Thursday night even a Tory Cabinet Minister was keen to distance himself from the out-of-touch Chancellor’s claim that the deal.
He added: “If the NAO chose to do it, it wouldn’t be something George could stop”.
Labour is leading the criticism of the tax deal.
The search giant recently settled a £130 million tax bill in UK.
“If we find there’s something to be concerned about, if someone writes to us and says maybe this is not how it should be, then we’ll take a look”, she said.
The tax arrangements of multinational companies in Europe is coming under heavy scrutiny right now. A Google spokeswoman said last September that the company was “naturally” attracted by Ireland’s relatively low corporate tax rate.
“Google et al broke to tax laws”, Murdoch says – and as a result, argues there needs to be “strong new laws to [make multinationals] pay like the rest of us”. “It is absurd to blame the company for “not paying their taxes”.
A spokeswoman for Google said the company pays taxes in all countries in which it operates.
“Diverted profits tax is only there to capture tax from those organisations that don’t pay corporation tax on their profits in the UK”. But a spokesman said the firm wasn’t agreeing that its Irish or American parents has a “permanent establishment” in the United Kingdom, a legal status would make them liable in the United Kingdom for corporate taxes. The calculation is based on Britain’s 30 percent company tax rate.
Most of the profit from multinationals doesn’t stay in Ireland either.
Advertisement
The European Commission’s competition chief has indicated she would be willing to look at complaints about Google’s United Kingdom tax arrangements.
