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Dublin: 15 °C Friday 29 August, 2014

Google exec grilled in UK over ‘devious’ use of Ireland to reduce tax

MPs suggested that more sales activities are taking place in the UK than the company is willing to admit to.

Sale and Operations executive at Google.
Sale and Operations executive at Google.

A TOP GOOGLE executive has been challenged by MPs in the UK over the internet giant’s sales and tax activities for its British and Irish operations.

The parliament’s Public Accounts Committee (PAC) leveled harsh criticism at Matt Brittin, Vice President of Sale and Operations in Northern and Central Europe, claiming the company is using loopholes to dodge tax in the UK and is, in fact, selling products from its London headquarters.

The company paid £6 million in corporation tax in 2011 though its sales in the UK, mostly processed through Dublin, are worth around £3.2 billion.

Google have 300 staff in Ireland, where they pay a corporation tax rate of 12.5 per cent, solely dedicated to looking after UK accounts but Britton admitted to the committee that “lots of aspects of selling” take place in the London office. However he stressed that the products sold – mainly advertising – were sold products by Google Ireland and not its UK office.

He said staff in the UK spend a percentage of time with clients, helping them to establish which Google products would serve them best but that the Dublin office works on building a campaign in the long-term, sometimes over a number of years.

‘Devious, calculated and unethical’

Chair of the committee Margaret Hodge raised several issues brought to her by whistleblowers in relation to invoices requesting payment in Sterling to a bank in London for products sold by Google Ireland, staff working on Android product development in the UK office and money transfers from Ireland to Bermuda which save the company a significant amount on its tax bill.

She asked Britton to think of how “hard-pressed families” and struggling businesses must feel looking at Google’s “rather devious, calculated and, in my view, unethical behaviour in manipulating” its business.

Britton insisted that staff in London do not make deals with clients on advertising sales and that the company is not breaking any tax laws in its UK and Ireland operations.

“Any customer that spends with us, they have to buy from Ireland, because that’s where the intellectual property sits,” he said.

Hodge and other MPs expressed their dissatisfaction with Britton’s responses and indicated that further interrogation is on the cards for Google in the future.

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