Cameron ‘very happy’ for European Union to investigate Google’s £130m tax deal

As the row escalated, a Number 10 source said: ‘My understanding is that the French and Italians have said how much tax they would like Google to pay.

In further embarrassment for George Osborne, who at the time celebrated the deal as a “major success”, one of Google’s biggest British shareholders has called on the company to pay “much more” in United Kingdom taxes.

The Italian authorities allege that Google, a unit of Alphabet Inc., reduced its tax liabilities by stating the company is based in Ireland and not in Italy.

There appears to be a “contradiction” between what Google said in November when it appeared before the committee and its attempts to settle tax disputes in the U.K., France and Italy, said Markus Ferber, a senior German MEP from the center-right.

On Thursday morning, EU Commissioner Margrethe Vestager told the BBC that she is “willing” to investigate the Californian tech giant’s tax set-up in Britain.

Citizens all over Europe, angry over perception that they mostly shouldered the burden of reviving their individual country economies, are criticizing multinationals that haul away their profits to offshore tax havens such as Bermuda. They have the ability to investigate if they believe state aid has been given in tax or anything else.

He said: “We’re talking about tax tat should have been collected under a Labour government, raised by a Conservative government”.

And the Times claimed yesterday Google was poised to pay the Italians 15 per cent of revenues, as opposed to our 3 per cent.

Writing in the FT Peter Barron, Google’s European public affairs chief, remarked: “In all the coverage of Google’s tax settlement, little has been said about the global tax rules and how they work”. If Google is found guilty, authorities could require it to pay the back taxes as well as substantial fines.

Google’s dominance of the search and online advertising market has brought it plenty of attention from the European Commission’s competition directorate, but the company has until now avoided becoming embroiled in the Commission’s investigation into the way companies move their profits to the countries that will offer them the lowest tax rates.

Vestager said it was unfair that different rules apply to larger companies than those adhered to by small innovative businesses.

Mr Osborne said: “When I became Chancellor Google paid no tax”.

Labour said the amounts recouped were “trivial” and leader Jeremy Corbyn told the House of Commons that experts had estimated it meant the company was paying at a rate of just 3% – a figure disputed by David Cameron at Prime Minister’s Questions.

“The aggressive tax avoidance strategies of corporations and the resultant major loss of revenue to exchequers around the world continue to be revealed, as with Google last week”, said British Green Member of European Parliament Molly Scott Cato.