The Google affair reveals gaping holes in our tax system – from the smoke and mirrors of royalty payments, to the charade of the tech giant’s Irish question
First, the case for the defence. It is not true that Google pays UK corporation tax at a rate of only 3%. That is not possible. Corporation tax, currently 20%, is the same for all companies.
Nor is it true that Google paid no tax at all before the settlement earlier this month with HM Revenue & Customs. Google UK’s accounts show a £20m tax payment in 2013, for example. The bill for back taxes of £130m, covering the past 10 years, arises from an audit by HMRC that was started in 2009. And, finally, the company’s statement that it “complies with the law” is 100% accurate. It now has a stamp of approval from HMRC to demonstrate as much.