UK lawmakers dismiss tax deal as too small

ben adhoc

February 24, 2016 2:17 PM

"The sum paid by Google seems disproportionately small when compared with the size of Google's business in the UK," the committee said.

UK lawmakers dismiss Google tax deal as too small

A panel of British lawmakers criticised a back-tax deal between Google and UK tax authorities on Wednesday, calling it "disproportionately small" and branding the company's explanation of its tax planning "disingenuous".

The Public Accounts Committee, which scrutinises public spending, also criticised the tax authority, saying it appeared "to have settled for less corporation tax from Google than other countries are willing to accept".

It was "not possible to judge whether a 130 million-pound ($180 million) tax settlement agreed between Google and HMRC is fair to taxpayers," the Committee said in its report.

Google, now a unit of holding group Alphabet Inc, was not immediately available for comment.

The internet search giant prompted a political storm last month when it announced the settlement, which was hailed by British finance minister George Osborne as a "great success".

The Opposition Labour party described it as "derisory" and said it showed the government's failure to act against corporate tax avoidance, a hot topic for austerity-weary Britons.

Google has said it follows the tax rules in every country in which it operates. But the committee questioned this.

"Google told us that international tax rules are complex and that it just follows them. This is disingenuous. There is nothing in the rules that says you must set up two companies in Ireland and send large royalty payments, via the Netherlands, to a company that is tax resident in Bermuda," the report said.

Google generated around 24 billion pounds of revenue in Britain between 2005 and 2015 -- the period covered by the settlement.

The back tax deal brought its total tax bill for the period to less than 180 million pounds.

The Committee said reports that tax authorities in France and Italy were seeking much larger sums from Google, raised questions about whether Her Majesty's Revenue and Customs (HMRC) was being too soft on big companies like Google.

HMRC was not immediately available for comment. ($1 = 0.7193 pounds)

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