Google to pay $265 million in UK back taxes

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Google to pay $265 million in UK back taxes

But critics want more.

Google has agreed to pay £130 million ($265 million) in back taxes to Britain, prompting criticism from opposition lawmakers and campaigners who said the "derisory" figure smacked of a "sweetheart deal".


In 2013, the company faced a UK parliamentary inquiry over its employment of hundreds of salespeople in Britain despite saying it did not conduct sales in the country, a key plank in its tax arrangements.




The Australian Tax Office late last year revealed Google had reported a total Australian income of $358 million and a taxable income of $91 million, and paid only $9 million in tax.

British finance minister George Osborne welcomed the deal, saying it reflected new rules that he had introduced, but others were less impressed.

John McDonnell, finance spokesman for the opposition Labour party, said the tax authorities needed to explain how they had settled on the figure of £130 million, which he described as relatively insignificant.


"This looks like another sweetheart deal."

Prem Sikka, professor of accounting at Essex University, agreed.

He said that for a company that enjoyed UK turnover of around £24 billion over the period and margins of 30 percent, the settlement represented an effective tax rate in the low single digits for Google.



Between 2005 and 2013, Google had UK turnover of £17 billion and its main UK unit reported a tax charge of £52 million, filings showed.

In 2014, it had UK revenues of around £4 billion, according to its annual report, but has not yet published its UK tax charge.


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