American technology rivals Apple and Google have found common cause to fight their corner amidst growing demands from across Europe for the firms to pay more tax.
It comes just days after Google agreed to cough up £130m in back dated tax over the past decade for the UK treasury, a sum derided by London mayor Boris Johnson as ‘derisory’ and sent Rupert Murdoch on a rant accusing Google of having "cleverly planted dozens of their people in White House, Downing St, other governments”.
Faced with a public backlash and ongoing investigations from Brussels however both firms are at pains to point out that their tax arrangements are perfectly legal, with US politicians also weighing into the growing row by labelling European moves as ‘discriminatory’.
Campaigners believe that Google ought to be paying around £200m per annum in corporation tax alone but coughed up just £20.5m in 2013 based on UK revenues of $5.6bn
Writing in the FT Peter Barron, Google’s European public affairs chief, remarked: “In all the coverage of Google’s tax settlement, little has been said about the international tax rules and how they work. Corporation tax is paid on profits, not revenue, and is collected where the economic activity that generates those profits takes place. As a US company, we pay the bulk of our corporate tax in the US: $3.3bn in the last reported year.”
Facebook is next in line to be audited by HMRC with the tax body investigating whether the social networking site has been underpaying since 2010.