Alphabet Inc The top tax official of ‘told UK authorities that the new UK tax – commonly known as the “Google Tax” – would not apply to the internet business, a report from Bloomberg. The tax – the tax on embezzled profits – was lifted last year amid growing fears that Alphabet and other tech companies were using loopholes. transfer the profits to offshore tax havens.
“Google Tax” does not apply to us
Thus, to discourage transfers to offshore tax havens, the British authorities have introduced this so-called “Google tax”, which allows the government. impose a 25% tax on any profits that it considers to have been inappropriately moved out of the United States. The standard UK corporate tax rate is 20%.
However, Alphabet’s vice president of finance – Tom Hutchinson – speaking to a parliamentary committee, which is investigating Google’s £ 130million ($ 188million) settlement with UK tax authorities, said that the new tax did not apply to past corporate profits.
“Because of our deal with HMRC, we are paying the right amount of tax, so we don’t have to pay anything else,” the executive said.
Alphabet Inc used tactics such as “Double Irish” and “Dutch Sandwich” to shift profits to a Bermuda subsidiary, Bloomberg reported in 2010. But, in Thursday’s hearings, the executive said that such strategies had no effect on corporate tax paid in UK. The Bermuda profit shift was designed to cut taxes in the United States, the executive said.
“Under the rules in the United States, this structure makes sense,” he said. “I don’t think it’s an aggressive structure. Hutchinson said his duty was to manage the tax affairs of his business effectively, and Alphabet paid 19% worldwide tax, “a reasonable amount of tax payable.”
Alphabet executive does not know his salary
Alphabet Inc executives have been accused of being unfamiliar with reality after one of the company’s top UK executives failed to tell MPs his salary. Matt Brittin appeared before the public accounts committee on Thursday to be questioned about the £ 130million in back taxes the company agreed to pay last month.
Brittin said that the company paid 20% UK tax, and not the 3% that was reported in the media. However, he was unable to say which number the company paid 20% tax on. Then Meg Hillier – chair of the committee – asked for salary figures to find out the gap between senior managers and ordinary citizens.
But, to their surprise, Brittin said he didn’t know his exact salary. “Don’t you know what you get paid, Mr. Brittin?” She laughs.