Share

UK finds Google misleading on tax

London - Google faced angry questions on Thursday from British lawmakers investigating its tax affairs and whether it had misled parliament in testimony last year.

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 didn't sell to UK clients.

Brittin said the company was already being investigated by the UK tax authority in relation to transfer pricing of services traded between Google UK and other Google companies, but added that he believed Google fully complied with UK tax law.

He also repeatedly denied misleading parliament in November, but added Google UK engaged in more selling activities than he had previously revealed.

In November, he said "Nobody (in the UK) is selling," and that Google Ireland was the contracting party for UK sales; 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.

On Thursday, Brittin said, "the UK team are selling, but they are not closing."

Members of parliament said that scheme was deliberately misleading. "It really doesn't wash," said Stephen Barclay, a PAC member with the ruling Conservative Party.

Committee chairperon Margaret Hodge said Google was not living up to its original motto of "don't be evil".

"You do do evil," by shielding UK income from tax, she said.

Corporate tax avoidance has become a major issue in Britain, where there are concerns over rising government debt and accusations from lawmakers that the UK tax authority has adopted a light-touch approach to taxing big businesses.

From 2006 to 2011, Google generated $18bn in revenues from the UK, according to statutory filings, and paid just $16m in taxes.

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.

Google's auditor, Ernst & Young, and representatives from the UK tax authority were also called to answer questions.


We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.92
-0.1%
Rand - Pound
23.91
-0.0%
Rand - Euro
20.45
+0.1%
Rand - Aus dollar
12.35
-0.0%
Rand - Yen
0.13
-0.1%
Platinum
911.00
+1.6%
Palladium
1,008.15
+0.6%
Gold
2,222.33
+1.3%
Silver
24.87
+0.9%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.9%
Resource 10
57,251
+2.9%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders