Google’s UK tax deal under investigation by the European Commission

EPA/JULIEN WARNAND

Denmark's EU Commissioner for Competition Margrethe Vestager gives a news conference after a college meeting at the European Commission Headquarters in Brussels,15 April 2015.

Google’s UK tax deal under investigation by the European Commission


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The UK’s £130m tax deal with Google will be reviewed by the European Commission after the Scottish National party called on the EU’s competition chief to investigate the agreement.

As reported by The Financial Times, Stewart Hosie, the deputy leader of the SNP, sent a letter to Margrethe Vestager, the EU’s antitrust commissioner on January 27. Hosie urged Vestager to address “growing concerns” about what he called an “opaque” deal, according to a copy of the letter seen by the Financial Times.

According to the newspaper, the letter is the latest sign of how the deal, hailed by UK chancellor George Osborne as a “major success”, has backfired politically, following warnings from some MPs and tax justice campaigners that Google may have got off too lightly.

“We know very little about the settlement,” Hosie wrote of Google’s agreement to pay back-taxes from 2005 onwards. “An independent verification of this settlement would establish confidence that [it] is within the boundaries of state aid regulations and is a fair deal for taxpayers of the United Kingdom.”

Meanwhile, Google sent a letter to the Financial Times defending its £130m deal. In the letter, Peter Barron, the company’s European public affairs chief, said: “After a six-year audit we are paying the full amount of tax that HM Revenue and Customs agrees we should pay… Governments make tax law and tax authorities independently enforce the law, and Google complies with the law”.

In an interview with BBC Radio 4s Today programme, Vestager said: “If we find that there is something to be concerned about if someone writes to us and says, well, this is maybe not as it should be then we will take a look”.

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