14 DAY TRIAL // U.K. Committee says Google has been avoiding paying taxes and its reputation will only be restored when they begin to pay what is due.
According to a U.K. parliamentary committee, the American Internet company should have paid more taxes over the years for its activities in the United Kingdom, The Wall Street Journal reports.
Google has been under scrutiny for some time now for the small amounts of taxes paid over several years.
Now, in a 64-page report, the public affairs committee doesn’t only claim that Google has to pay more taxes, but also criticizes the U.K. tax authority for failing to challenge Google over its tax arrangement.
They also said that tax avoidance by multinational firms illustrates wider problems in the country.
They have urged the government to strengthen the tax authority and to simplify the tax code so companies like Google can find fewer loopholes to exploit.
Google maintains its stance on the matter and says that it has complied with all tax rules in the United Kingdom.
"It's clear from this report that the public accounts committee wants to see international companies paying more tax where their customers are located, but that's not how the rules operate today. We welcome the call to make the current system simpler and more transparent," the spokesman said.
Over the past six months, there have been numerous heated public hearings where the members of the committee have discussed the issue of how much tax large companies should pay.
Aside from Google, Starbucks and Amazon have also been invited to the hearings for similar issues.
So far, Google says that all its sales are completed in Ireland and so it pays more corporate tax there. However, this is very convenient for the company, since Ireland has a 12.5 percent rate, while the UK’s is 23 percent.