UK lawmakers challenge Google's 'smoke and mirrors' on tax

Thu May 16, 2013 11:57am EDT
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By Tom Bergin

LONDON (Reuters) - Google Inc faced angry questions on Thursday from British lawmakers investigating its tax affairs and whether it had misled Parliament in testimony last year, adding fuel to a debate on taxation that has risen to the top of the UK political agenda.

Google's Northern Europe boss, Matt Brittin, was called back to testify to Parliament's Public Accounts Committee (PAC) after a Reuters investigation showed the company employed staff in sales roles in London, even though he had told the committee in November its British staff were not "selling" to UK clients.

Brittin said the company was already being investigated by the UK tax authority in relation to transfer pricing of services traded between Google UK Ltd and other Google companies, but added that he believed Google fully complied with UK tax law.

He also denied misleading Parliament in November.

But lawmakers challenged the veracity of his November testimony and comments made on Thursday.

"It really doesn't wash," said Stephen Barclay, a PAC member with the ruling Conservative Party.

Committee chairwoman Margaret Hodge said Google was not living up to its original motto of "don't be evil".

"You are a company that says you do no evil, and I think that you do do evil in that you use smoke and mirrors to avoid paying tax," she said, adding that the company engaged in "devious, calculated and, in my view, unethical behavior".   Continued...

Google's Northern Europe boss Matt Brittin leaves a British parliamentary Public Accounts Committee inquiry into tax avoidance at Portcullis House in London May 16, 2013. REUTERS/Neil Hall