Google to pay £130 million to Britain in back taxes after government inquiry

London, January 23

Technology giant Google is to pay £130 million (172 million euros, $185.4 million) in back taxes to Britain following a government inquiry into its tax arrangements, a company spokeswoman said on Friday.

It follows a six-year probe by Britain’s HM Revenue and Customs (HMRC) in response to controversy over low taxes paid by multinational corporations which operate in Britain but have headquarters elsewhere.

“We have agreed with HMRC a new approach for our UK taxes and will pay £130 million, covering taxes since 2005,” a Google spokeswoman said.

“The way multinational companies are taxed has been debated for many years and the international tax system is changing as a result. This settlement reflects that shift.”

In future, Google will pay taxes in Britain according to revenue from advertisers based in Britain, something that ‘reflects the size and scope of our UK business’, the spokeswoman said.

The BBC reported that Google would now register a greater proportion of its sales activity in Britain rather than Ireland, where its European headquarters is based and which has a lower rate of corporation tax.

An HMRC spokesman welcomed the agreement.

“The successful conclusion of HMRC inquiries has secured a substantial result, which means that Google will pay the full tax due in law on profits that belong in the UK,” the spokesman said.

“Multinational companies must pay the tax that is due and we do not accept less.”

Britain’s Finance Minister George Osborne has vowed to close tax loopholes and introduce a so-called ‘Google tax’

to stop firms moving profits overseas.

Google is among several top technology firms under pressure over complex tax arrangements.

Apple agreed to pay Italy 318 million euros to settle a tax dispute last month, and in November world leaders of the Group of 20 top economies vowed to clamp down on schemes by multinationals to minimise tax.

The plan would force multinationals to pay tax in the country where their main business activity is based.

OECD group of rich nations has estimated that national governments lose $100 billion to $240 billion (89 billion euros to 210 billion euros), or four to 10 per cent of global tax revenues, every year due to tax-minimising schemes of multinationals.

$1 billion for search spot on iPhones

SAN FRANCISCO: Google paid Apple a billion dollars in 2014 to be the go-to search tool on iPhones, Bloomberg reported, citing court documents. The rare glimpse into financial figures typically kept private by Google and Apple was provided by an Oracle attorney at a court hearing in San Francisco last week, as per Bloomberg. A transcript of the proceeding was not among documents available at court’s digital filing system on Friday, in the wake of a move by Google lawyers to have it redacted and sealed. An Oracle attorney revealed that Google paid a billion dollars in the year 2014 alone to secure its position as the default search engine on iPhones, Bloomberg reported. Google lawyers argued that Oracle ‘improperly disclosed highly sensitive, confidential information’ regarding revenues and profits related to its Android mobile operating software, a copy of the motion showed. Android revenue details cited by an Oracle attorney in open court last week had been labelled ‘Highly Confidential — Attorney’s Eyes Only’, Google contended. As per Bloomberg, an Oracle lawyer also said in court that Google had $22 billion in profit from Android, which it makes available free to mobile device makers. The figures were made public briefly during a long-running legal fight over whether copyright-protected elements of Java code made by Oracle were used in Android sans permission.