Google: MEPs add to pressure on Osborne over 'bad' tax deal
European MPs want George Osborne to explain the "very bad deal" that UK tax authorities have struck with Google.
The call adds to pressure on the chancellor from within the UK.
Google agreed last week to pay £130m in back tax to HM Revenue and Customs (HMRC), with an official saying that that was the "full tax due in law",
But the vice chair of a European tax committee said the deal showed the UK was preparing "to become a kind of tax haven to attract multinationals".
French MEP Eva Joly said the settlement was "bad news for everybody" and told Radio 4's Today programme that MEPs would call the chancellor to appear before them.
She said it was difficult to know on what basis the figure was reached and she criticised the attempt to "make publicity out of it" by talking about large-sounding figures which she said were a fraction of what should be paid.
Ms Joly, who is vice chair of the Special European Parliamentary Committee on Tax Rulings said: "We will ask him [Mr Osborne] to come and explain and I hope he will."
'Relatively small'
The call comes on top of criticism Mr Osborne has already faced from some politicians in the UK over the Google tax deal. Shadow chancellor John McDonnell has written to him demanding details of how the settlement was reached.
And Conservative MP Mark Garnier, a member of the Treasury committee, said the agreement represented a "relatively small" amount of money compared with Google's UK profits.
But Ms Joly of the Special European Parliamentary Committee on Tax Rulings will also call the head of Google to appear before it, said Ms Joly, "because this is not fair competition".
The Italian finance minister can also expect a call to appear before the MEPs, according to Ms Joly.
Reports in today's Times newspaper say Italy is poised to strike a far tougher tax deal with Google than the UK's. It refers to stories in Italian media that suggest Google will pay £113m in back taxes to the Italian government. The deal hasn't been completed so it is not known how many years it covers.
Multinationals
Google agreed to the the back taxes after an "open audit" of its accounts by the UK tax authorities.
The payment covers money owed since 2005 and follows a six year inquiry by Her Majesty's Revenue and Customs.
Google is one of several multinational companies to be have been accused of avoiding tax, in spite of making billions of pounds of sales in Britain.
Senior figures at the US search giant said it would follow new rules which would see it pay more taxes in future.
Last week, the head of Google Europe, Matt Brittin was asked by the BBC whether the back-payments showed Google's critics were right that the company had avoiding paying tax in the past. Mr Brittin replied: "No."
"We were applying the rules as they were and that was then and now we are going to be applying the new rules, which means we will be paying more tax.
"I think there was concern that international companies were paying only in respect of profits that they make and those were the rules and the pressure was to see us pay in respect of the sales we make to UK customers – and the same for other companies.
"So, we are making a change because we want to continue to comply with the rules and the rules are changing."
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