Under the terms of a recently struck deal, Google will pay British HM Revenue and Customs 130 million pounds or $185 million in back taxes after its tax books were checked.
The British tax auditor found the company’s structure too complicated and accused Google of evading taxes.
Google has also agreed to pay future taxes in the UK more commensurate with UK revenue. “We will now pay tax based on revenue from UK-based advertisers, which reflects the size and scope of our UK business,” the Head of Google Europe Matthew Brittin said in a statement.
The investigation was conducted for 6 years. It was initiated as there were a lot of discussions of transnational companies registered outside of the UK and used complex accounting to sidestep corporate taxes.
In 2013 it became known that Google had paid only $9 million of tax in 2001 with the profit $4.8 billion. The tax authorities are confident that Google held back information about its profit. Besides the company was trying to decrease tax amounts to be paid by means of its facilities on the Bermuda Islands where corporations can go tax free and the headquarters in Ireland where the tax is lower than in Britain. However, it should be mentioned that the company didn’t break the law.
