Google to face grilling by UK lawmakers over tax deal


  • TECH
  • Monday, 25 Jan 2016

Show cause: A UK parliamentary committee will invite Google to testify about a back tax deal under which it will pay £130mil (RM788.71mil) to settle claims covering a 10-year period. — Reuters

LONDON: A UK parliamentary committee will invite Google to testify about a back tax deal under which it will pay £130mil (RM788.71mil) to settle claims covering a 10-year period – an amount the opposition Labour party has described as derisory.

Meg Hillier, the Labour party chairwoman of the Public Accounts Committee, tweeted at the weekend that she would call Google, now part of holding company Alphabet Inc, and the UK tax authority to explain the “cosy deal”.

Google and Her Majesty’s Revenue and Customs were not immediately available for comment.

Corporate tax avoidance has prompted anger in recent years among citizens who question whether the burden of paying to combat the financial crisis was evenly shared.

A study conducted by accountants PricewaterhouseCooper for the 100 Group, a lobby body representing around 100 of the biggest UK companies, showed their combined corporation tax bill was half 2010 levels in 2015, despite rising profits.

Google’s tax deal brings its total UK tax bill over the period to around £200mil (RM1.21bil).

Over the period, its around £24bil (RM145.61bil) in UK revenues would have generated a tax bill of almost £2bil (RM12.13bil), if the UK unit reported taxable profits in line with group margins of around 30%, according to Reuters calculations based on Google filings.

Google’s tax bill is reduced because its European profits are channeled to Bermuda. — Reuters

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