EU regulators to examine Google UK tax issues raised in SNP letter

European Union antitrust regulators said on Thursday they would examine a complaint from the Scottish National Party (SNP) about Internet group Google’s back tax deal with British tax authorities.

The 130 million pound ($185 million) settlement, announced on Friday, was hailed by the UK government as a major success but dismissed as “derisory” by the opposition Labour Party and criticized by other parties.

The European Commission itself took aim on Thursday at tax avoidance by multinationals, proposing that EU states be allowed to tax corporate profits at home in some circumstances even if the money has been transferred elsewhere to avoid such payments.

“Specifically concerning Google’s tax treatment in the UK, the Commission can confirm it has received a letter from a member of the Scottish National Party on this matter,” the EU’s competition enforcer said in an email.

“The Commission will look at it and issues raised, as with all letters received from stakeholders.”

The letter calling for a probe was sent by SNP deputy leader Stewart Hosie.

Talking to Sky News, he said it was important “proper investigations are carried out and she (European Competition Commissioner Margrethe Vestager) can either give them a clean bill of health or not.”

Earlier on Thursday, Vestager had told BBC radio she would examine Google’s tax deal if she received a complaint.

“If we find that there is something to be concerned about. If someone writes to us and says ‘well maybe this is not as it should be’ then we will take a look,” she said.

Google says it is paying all the tax that is due.

“After a six-year audit we are paying the full amount of tax that HM Revenue & Customs (HMRC) agrees we should pay, including 130 million pounds in additional back tax,” Peter Barron, Google’s vice president for communications and public affairs, said in a letter to the Financial Times.

“Governments make tax law, the tax authorities independently enforce the law, and Google complies with the law,” he said in the letter.

Tax avoidance has become a hot political issue in Britain, where people question whether the burden of fixing the public finances has been fairly shared.

“The point we would make is that HMRC have been very clear that they have collected all tax that is due,” said a spokesman for British Prime Minister David Cameron.

He said the UK would cooperate if an inquiry were launched.

Source: Reuters:James Davey / Foo Yun Chee