Alphabet Inc (NASDAQ:GOOGL) is not worried about the critics saying that it was let off very lightly by the taxation authorities in Great Britain. The company defended its settlement with a taxation panel. The search engine giant’s VP of Finance, Tom Hutchinson, said that its deal was the biggest settlement it struck outside the USA. He appeared before the public accounts committee of the Parliament that was entrusted with the responsibility of ensuring fair tax collection.
Paying the Right Taxes
Alphabet’s agreement with the taxation authorities in Britain required them to pay $189 million or 130 million pounds sterling in taxes and increase future tax payments. That ignited outcry in the United Kingdom as they demanded that the company pay more since the country was the second largest market after the USA. The search engine generated $7.07 billion of revenue in 2015 from the UK.
However, Hutchinson said that the company was paying the right amount of taxes only and defended its tax arrangements. He also said that the deal fully complied with the laws of the land. Its European Operations head, Matt Brittin, who was also heard by the committee, said that the company’s tax payments reflected the economic activity accurately that the company was carrying out there. He also said that it was paying the taxes as advised by the Tax Authorities in Britain.
Templates Set
Alphabet’s agreement with the Tax Authority was considered as part of wider efforts of MNCs to set templates for treating the taxation matters at the international level and the frequent changes being made. Governments in Europe are known for making changes in global tax treaties. As a result, MNCs are forced to pay more taxes. On their part, the corporations were also shifting their tactics to comply with the fresh rules by altering their structures.
Currently, Alphabet is facing audits in a number of countries like France and Italy and faces a $1.13 billion tax and penalties threat. Last month, France indicated that it was talking to the company and trying to reach a deal.