'International tax' needs reform. Google's chicken bill makes me chuckle – comms guy
'We would like to be seen to be paying the right amount'
Google's communications veep has called for reform of the international tax system in wake of the backlash against the company's £130m tax deal with HMRC.
Speaking on the Andrew Marr Show yesterday, Peter Barron said: “We think that the international tax system, which has been around since the 1920s, could do with reform and we would like to see more simplicity and more clarity – not least because we would like to be seen to be paying the right amount."
Barron insisted that the £130m arrangement for Google to pay its back taxes between 2005-2014 was not a sweetheart deal.
He said: “Identifying what the economic activity is, what the added value in the UK is, is a difficult business and that is what we have been working out with HMRC over the years and all the discussion about [a] so-called permanent establishment.”
Barron said: “The point is the corporation tax is levied in the economic activity where its profits happen. And the reality with Google is that the bulk of that activity happens in the United States. So we have 17,000 software engineers in California,” he said.
The company has 2,300 employees in the UK, with three major headquarters and a new £1bn building in Kings Cross, London.
Marr quizzed Baron on the claim that the company spends more money on chicken for its canteen than it does in UK tax.
"I must admit I read that in the course of the week and I smiled," he said. ®