Google Tax Deal with UK Criticized by MinistersAdded: Thursday, February 4th, 2016
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A UK senior government minister believes that the tax deal concluded between Google and the British government is not very fair in relation to other industry players. This admission by the business secretary came after Google claimed it could not say how much British profit has been generated in the past decade.
A couple weeks ago, the UK government stroke a deal with the tech giant, where Google agreed to pay £130m in back taxes for the past 10 years. However, both parties to the deal were criticized for the negotiations between HMRC officials and Google. While the government initially labeled the deal a “major success”, many people felt that there was a sense of “injustice” with it. They actually consider it unfair that giants like Google could speak directly to the government and tax officials about their affairs while SMEs couldn’t do the same – they don’t operate multiple jurisdictions across the globe and can’t shift profits around, so they feel that unfairness.
At the same time, Head of Communications at Google across Europe claimed that he could not answer questions about Google’s profits over the past ten years – despite reports that the company had generated £7.2bn and therefore is paying less than 3% in corporation tax on its profits in the United Kingdom. He claimed that Google pays corporation tax of 20% and there had been no “sweetheart deal”. In other words, the £130m in question was an additional tax. All he could reveal was that the company paid £42.6m for the last 18 months. Although the United Kingdom is Google’s second biggest global market, calculating the added value in the country appears difficult.
When asked why the tech giant paid its taxes in Ireland, (where corporation tax is significantly lower), Google responded that most of its advertising deals were closed in Ireland.
The matter is that corporation tax is not on sales or revenues, but on profit. However, identifying the amount of profit over the last decade is not so easy. It is expected that the company will announce that it has generated £30bn of profits from non-American sales in Bermuda (no corporation tax is paid there). As for the United Kingdom, it is Google’s second largest market after the US (11% of global revenues).
Thursday, February 4th, 2016
|Typical british MP, probably just peeved off that he never got a slice of the golden google cake backhander|
|or maybe a conscientious MP asking why it`s only 130 million and not closer to 2 Billion which is what is owed @20% corporate tax when such payment is owed and it isn`t a case that should be settled for 1/20th of what is owed when the balance would pay off the debt owed by the NHS in its entirety.|
|Conscientious MP?, If there were such a thing then they would work for a fraction of the ridiculous salarys they get and refuse the perks that come with it. But yes, totally agree with you regarding the debt owed by the NHS.||
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