Google Defends U.K. From Tax Accord, Says it's Legal Not "Sweetheart Deal", Faces Possible EU Investigation

Google Inc. rebuffed the allegations that it already achieved a "sweetheart deal" with the British Tax Commission as a dispute continued over the 130 million-pound ($185 million) settlement. It was reportedly considered by the U.K. Treasury officials as a "victory" and opposition lawmakers as "derisory".

United Kingdom Business Secretary Sajid Javid separately said the deal  "was not a glorious moment" for the government. He also expressed the "sense of unfairness" that  small scale businesses felt for not being able to use the tools that multinational businesses utilize to lessen their taxes. 

As reported by Bloomberg News, Google's Head of Communication Peter Barron clarified that the tech giant did not reach any "sweetheart deal" as it was merely an arrangement with the HMRC. "Government puts the laws in place, HMRC enforces the laws and we follow the laws. If the laws change, of course we would follow them," he said.

Meanwhile, an investigation is being planned by Competition Commissioner of Europe, Margarethe Vestager, who claimed she has the power to investigate the issue. At any moment, she can put her intelligence team and conduct a research about the "alleged sweetheart deal."

Current shadow chancellor John McDonnell has, in fact, requested Vestager to conduct an investigation on an agreement between Google and Revenue Customs. The chancellor believes that she has the ability to do this investigation quickly, Standard News reported.

Moreover, the chancellor is showing some data and reports that the Italy and France are looking to "claw back" additional money from multi-nationals like Google.

Based on the reports of BBC, former Conservative Chancellor Lord Lawson stated that the deeds of Google and Customs Revenue are just "grossly unfair". He also added that the government must fix this as soon as possible because the small scale industries are affected.

The American tech giant which makes most of its UK profits through online advertising, paid UK £20.4m worth of  tax back in 2013. The value of its British sales that year was £3.8bn.

Google's European headquarters particularly in the Irish Republic has a lower corporation tax rate than the UK. It uses company structures in Bermuda as well, where the corporation tax rate is zero.

Tags

Google, U.K. Taxes, revenue, online marketing, Sweetheart Deal, Tax Violations

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