Google to pay £130 million in back taxes in the UK

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By Larry Banks

Search giant Google has come to an arrangement with the UK’s tax authorities to pay £130 million in back taxes, after a six year investigation by the British government amid clamping down on tax avoidance by multinationals.

The low figure of £130 million ($185 million) comes after the firm agreed to change its accounting methods so that more sales are processed through Britain instead of Ireland, where corporate taxes are lower.

The deal covers earnings the firm made between 2005 and 2015. Furthermore, Google has said it will pay more taxes in the future. The UK is currently one of Google’s largest markets where it paid £20.4 million ($29 million) of tax on £3.8 billion ($5 billion) revenue in 2013.

In a BBC interview, Matt Brittin, head of Google’s European operations, denied that the US company has avoided paying taxes. He says the deal is a broader shift in tax rules set by the Organisation for Economic Cooperation and Development (OECD). The OECD has recently said that multinational companies should not move profits around to pay less taxes.

Google has its European HQ in Ireland, which has a much lower rate rate than the UK. It also has structures set up in Bermuda where the tax rate is almost zero, but says such practices are legal and that they have always complied with international tax rules.


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