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Google defends its UK tax bill

Thursday, February 11, 2016 - 01:38

Google executives have been grilled by British lawmakers about the amount of tax they paid in the country. It follows a public outcry over corporate tax regulations which some say are unfair. Hayley Platt reports.

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Back in the hotseat. Google sent it's UK chief Matt Brittin and Tom Hutchinson, Google Inc's Vice President of Finance, for a grilling by UK lawmakers. And they weren't disappointed. Chairwoman of the Common's committee Meg Hillier. (SOUNDBITE) (English) UK PARLIAMENT ACCOUNTS COMMITTEE, MEG HILLIER, SAYING: "Do you hear the anger and frustration out there that with those huge figures you settled for a figure of £130 million." Hillier was referring to the £1.8 billion of revenues Google made in the UK over 18 months. Profits for the same period were just £106 million. Many say the tax bill was far too small. But Brittin insisted Google had done nothing wrong. (SOUNDBITE) (English) GOOGLE, EUROPE, MIDDLE EAST & AFRICA, PRESIDENT, MATT BRITTIN, SAYING: "You wrote a report after we appeared last time suggesting two things, one we should look at our tax structures which the HMRC has done and second, that we should pay tax proportionate to our UK sales. If those were the rules, that's what we would do, but those are not the rules - the rules are, you should pay taxes on the profit on the economic activity which is at the heart of what HMRC looked at." Google register's its European sales in Ireland, where corporation rates are low. The money is then transferred to its holdings in Bermuda, a known tax haven. It's a legal loophole used by many multinationals. Michael Hewson is from CMC Markets. (SOUNDBITE) (ENGLISH) CMC MARKETS, MARKET ANALYST, MICHAEL HEWSON, SAYING: "Ultimately what Google is doing is not illegal so what MPs need to do is push forward a reform process to the tax code , not only here in the UK but in Europe as well." The tax office says that under the UK's complicated laws its hands are tied. The settlement it reached with Google followed a six year investigation.