Pressure is mounting on the European commission to launch a full state aid investigation into the UK’s £130m tax settlement with Google after France’s finance minister attacked the deal, reports The Guardian.
Michel Sapin said HMRC’s settlement, which allows Google to continue booking £5bn of UK sales via Ireland, “seems more the product of a negotiation than the application of the law”.
His intervention on Tuesday will add force to widespread accusations that Britain’s tax settlement amounts to a sweetheart deal for Google.
According to the Financial Times, Sapin told a conference in Paris: “The French tax administration does not negotiate the amount of taxes owed. It applies the rules.”
Google’s parent company, Alphabet, became the world’s most valuable company after the US markets opened on Tuesday. Shares rose after it was announced overnight that 2015 revenues grew by 13% to $75bn (£52bn), while the group’s global tax rate fell to just 17%.
Google’s UK company, which the search group insists only provides support services to companies in Ireland and the US, paid £21m in tax in 2013, according to its latest published accounts.
British tax inspectors began investigating Google’s UK tax affairs in 2009, and HMRC insists it has closely scrutinised the legality of the search group’s controversial Irish structure. That examination is said to have involved visits to Google’s offices and scrutiny of activities as far back as 2005.