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Google faces investigation into UK tax arrangements as MPs brand its arguments 'deeply unconvicning'

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By Stephen Lepitak, -

June 13, 2013 | 2 min read

An investigation into Google’s tax arrangements in the UK should be implemented a committee of MPs has decided.

Google’s bosses have been questioned on the amount of tax it is paying to operate in the UK over recent weeks, with the Parliamentary Accounts Committee’s report stating that Google’s argument to avoid paying UK corporate tax, by claiming its sales to UK clients came from Ireland, was ‘deeply unconvincing’.

Said Margaret Hodge, chair of the committee: “Google brazenly argued before this committee that its tax arrangements in the UK are defensible and lawful. It claimed that its advertising sales take place in Ireland, not in the UK.

"This argument is deeply unconvincing and has been undermined by information from whistleblowers, including ex-employees of Google, who told us that UK-based staff are engaged in selling. The staff in Ireland simply process the bills. Google also conceded at this second hearing that its engineers in the UK are contributing to product development.”

As a result, an investigation into Google’s tax activities is expected to be launched.

Last month, The Drum ran an online survey of media buyers which found that 80 per cent of media buyers had dealt with the London office rather than the Irish office when it came to buying advertising.

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