Google tax deal review reminds us of Europe's benefits

That there is an international body prepared to investigate the controversial agreement is something to be celebrated

Thursday 28 January 2016 23:16 GMT
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The £130 million HMRC deal on Google's back taxes was hailed as a 'victory' by Mr Osborne
The £130 million HMRC deal on Google's back taxes was hailed as a 'victory' by Mr Osborne

Multinational corporations straddle the globe, with no concern for international borders, harvesting their profits and squirrelling them away wherever it suits them, and where humble national tax collectors cannot reach them. That is the reality now, we have been told with increasing certainty in the wake of Google’s “derisory” tax settlement.

The Conservatives accepted this so-called “sweetheart deal” and, before them, Labour did nothing. So thank goodness then, for those much maligned, faceless bureaucrats of the European Union. The EU’s Competition Commissioner, Margrethe Vestager, has said that she would be willing to investigate whether the deal, brokered between Google and Her Majesty’s Revenue and Customs in the course of 17 meetings, might constitute “illegal state aid”.

Much of the anger about the Google tax deal has been engendered by the likelihood that the company will be made to pay a far higher rate of tax to the French and Italian governments.

That there is an international body prepared to investigate whether UK authorities may have colluded with a vast company in a way that appears to be against the interest of the taxpayer is something to be celebrated. If Britain were to leave the European Union, it would lose access to this potential remedy.

If multinational corporations are the future – and it seems likely that they will be – a multinational approach to holding them to account is the only way possible. It is not the only time that the supposedly invisible European Union has acted to improve the lot of the ordinary person at the expense of big corporations. For example, the end of exorbitant charges for data roaming means that most people can now afford to use their smartphones on the Continent.

The EU has its problems, certainly – but that doesn’t mean that it is not, in the main, a benefit to Britain.

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