Calling Google’s tax settlement last month “disproportionately small” when compared with the size of the company's business in the country, Britain's Committee of Public Accounts raised concerns Wednesday that multinational corporations were benefitting from soft government rules that “do not produce a fair outcome”
The committee said it was impossible to judge whether the Google deal itself was fair to the taxpayer because of the lack of transparency over the details of the settlement. The committee also called on the U.K. tax authority, HMRC, to make the tax accounts of multi-national companies open to public scrutiny.
HMRC must "lead the way in pressing for changes in international tax rules to prevent aggressive avoidance by multinational companies," the committee said in a statement.
In January, Google’s holding company, Alphabet Inc., agreed to pay 130 million pounds ($180.9 million) in back taxes to Britain, covering the period January 2005 to June 2015, following the conclusion of a six-year investigation by HMRC.
U.K. is Google's second-largest market, contributing over $7 billion or 10 percent of Google’s worldwide revenue in 2015.
"Public anger has been palpable ever since this settlement was announced and we still don’t know the full details…this lack of transparency does nothing to build confidence that big corporations are paying their fair share of tax,” Meg Hillier, chair of the accounts committee, said.
The committee also found that to avoid U.K.’s corporation tax, Google relied on "the deeply unconvincing argument that its sales to U.K. clients take place in Ireland, despite clear evidence that the vast majority of sales activity takes places in the U.K."
The committee also called on the tax authorities to monitor the outcome of other tax investigations into Google and re-open the case if relevant new evidence becomes available.