Google complies with Government tax laws, Google says

Google's response comes as the furore over its tax deal escalates to the European Commission

Google has spoken in the row over its tax payments.

In a letter in the Financial Times, Peter Barron, vice president of public affairs, said that Google paid $3.3 billion in tax in the US in the last year. 

Google is "paying the full amount of tax that HM Revenue and Customes agrees we should pay", Barron said, including £130 million in so-called "back taxes" due since 2005.

"Governments make tax law, the tax authorities independently enforce the law, and Google complies with the law," Barron said.

Google's response comes as the furore over its tax deal escalates to the European Commission, which has said it will publish plans that may force Google and other multi-national companies to pay more in tax.

Margrethe Vestager, the European Competition Commissioner, said she would investigate Google's tax arrangements if someone complained about them.

The SNP swiftly released a statement to say that a letter was on its way.

Apple is also under pressure to pay back billions of dollars in back taxes in the EU. Apple chief executives have hit back at the investigation into its European tax arrangements, saying that the company doesn't expect to have to pay.

Barron said taxes were a matter for Governments to decide, and for companies to comply with. "In all the coverage of Google’s tax settlement, little has been said about the international tax rules and how they work. Corporation tax is paid on profits, not revenue, and is collected where the economic activity that generates those profits takes place," he said.

On Wednesday, European MEPs called for the Chancellor George Osborne and Google to appear in front of the committee on tax rulings to explain the tax deal

Eva Joly, vice chair of the Special European Parliamentary Committee on Tax Rulings, said that the deal was “not fair competition” and looked like the UK wanted to become a tax haven.

 

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