EU considering probe of Google tax deal in UK

The EU’s competition commissioner said Thursday she was prepared to investigate Google’s tax deal with Britain as the US Internet giant insisted it complied with all taxation laws.

As Ars noted earlier this week, Google-despite paying a little bit more tax (the aforementioned £130 million) to cover the revenues it books from United Kingdom advertisers-will continue to make use of a so-called “double Irish” scheme, whereby it places its intellectual property into a company registered in Ireland, but which is controlled from Bermuda. She said the European Union “will take a look” if appropriate concerns are brought to her attention.

Accountants and tax experts have been scratching their heads trying to understand how Google’s economic activity in the United Kingdom, based mainly around advertising, was calculated.

But he added: “The commission is clear – all companies must pay their fair share of taxes where they earn their profits”.

“They are beneficiaries of state spending at many levels and in return they would get respect”.

“Hopefully, we will end up in a situation where companies pay taxes in the countries where they also make their profits and these new proposals will take us another step down that road”, said Ms Verstager.

“It is in the long-term interests of Google and others of that ilk to pay decent rates of tax”, he told The Times newspaper.

“After a six-year audit we are paying the full amount of tax that Her Majesty’s Revenue and Customs (HMRC) agrees we should pay, including £130 million in additional back tax”, Barron said, in a letter to the Financial Times newspaper.

The deal was agreed between Google and the UK tax authorities, although the UK Government has come under a lot of criticism over the last few days for allowing the deal to go ahead. France is pursuing a much larger settlement with Google over back taxes, and Italy has recently settled a tax deal with Apple for $350 million – a third of what Italy said it was owed.

Downing Street, meanwhile, sought to play down reports that France and Italy had succeeded in securing far tougher settlements with Google.