One of Google's biggest shareholders has called on the company to pay more tax amid growing backlash over the sweetheart 'back taxes' deal struck with HM Revenue and Customs, it has emerged.
Chancellor George Osborne hailed the £130m 10-year agreement as a "major success" on Friday, but critics have since pointed out that the settlement is chickenfeed compared to Google's 2014 UK revenues of £4.6bn, giving the company an effective tax rate of three per cent.
British technology investor James Anderson, who owns £120m of shares in Alphabet, Google's parent company, said on Thursday that it was time for Google and other tech giants such as Facebook to start voluntarily paying far higher tax rates, of around 15-20 per cent, in all the countries in which they operate.
Speaking to the Times, Anderson said:
My take remains that it is in the longterm interests of Google and others of that ilk to pay decent rates of tax and that they and others would be best served in taking the lead in volunteering this.
They are beneficiaries of state spending at many levels and in return they would get respect.
France is reportedly negotiating a tax settlement with the Google worth three times what the UK has managed to wangle in 'backtaxes', even though Google's UK market is much bigger.
Italy, too, is poised to make the internet giant hand over 15 per cent of its revenues.
Eva Joly, vice chair of the Special European Parliamentary Committee on Tax Rulings, said on Wednesday's Today programme that the deal was "exceedingly unfair" and makes it look as though the UK wants to become a tax haven.
Google’s European public affairs chief, Peter Barron wrote in an open letter in the Financial Times today:
Governments make tax law, the tax authorities independently enforce the law, and Google complies with the law.
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