UK lawmakers challenge Google’s ‘smoke and mirrors’ on tax

“Google Inc faced angry questions on Thursday from British lawmakers investigating its tax affairs and whether it had misled parliament in testimony last year, adding fuel to a debate on taxation that has risen to the top of the UK political agenda,” Tom Bergin reports for Reuters.

“Google’s Northern Europe boss, Matt Brittin, was called back to testify to parliament’s Public Accounts Committee (PAC) after a Reuters investigation showed the company employed staff in sales roles in London, even though he had told the committee in November its British staff were not ‘selling’ to UK clients,” Bergin reports. “Brittin said the company was already being investigated by the UK tax authority in relation to transfer pricing of services traded between Google UK Ltd and other Google companies, but added that he believed Google fully complied with UK tax law. He also denied misleading parliament in November.”

Bergin reports, “But lawmakers challenged the veracity of his November testimony and comments made on Thursday. ‘It really doesn’t wash,’ said Stephen Barclay, a PAC member with the ruling Conservative Party… In November, Brittin told the PAC ‘Nobody (in the UK) is selling.’ He said all UK sales were conducted by Google Ireland and UK staff were only involved in promotional activity. That arrangement allows Google to shelter most of its income on UK sales from taxation, since Google Ireland sends most of its turnover to an affiliate in Bermuda.
But the Reuters report revealed that Google advertised for staff in London to ‘negotiate’ and ‘close’ deals and that LinkedIn profiles of dozens of staff claimed they engaged in such work. Committee chairwoman Margaret Hodge said the PAC had also been approached by whistleblowers who had said they had worked for Google in London, selling advertising.”

“From 2006 to 2011, Google generated $18 billion in revenues from the UK, according to statutory filings, and paid just $16 million in taxes,” Bergin reports. “Google is just one of a raft of companies including Apple Inc., Microsoft, Starbucks and Amazon.com, whose tax affairs have come under scrutiny. All the companies say they follow international tax rules.”

Read more in the full article here.

MacDailyNews Take: Britain’s not happy with Brittin.

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