Google to pay 170 million euros in back tax in the UK

Google is going to pay 130 million pounds, converted 170 million euros, in back taxes to the United Kingdom. The amount came about after a six-year investigation by the British tax authorities.

Matt Brittin, the head of Google in Europe, announces the payment to the BBC. The amount relates to Google’s income since 2005. Google promises to pay appropriate amounts of tax to the United Kingdom in the future. According to the BBC, Google paid 24.5 million euros in tax in the United Kingdom in 2013. In that year, however, the company achieved a turnover of almost 4.6 billion euros. Brittin doesn’t see paying back taxes as admitting to tax evasion by the company.

Google pays the majority of its taxes in the country where it is headquartered. In the case of Google Europe, that is Ireland, which is not part of the United Kingdom. Ireland has a more favorable tax environment than the UK. Other large multinational corporations such as Facebook and Amazon have also been criticized for choosing to locate their headquarters in so-called tax havens. However, these practices are not illegal.

The parties involved have not disclosed what amount the tax will be charged and how much Google will officially have to pay in arrears. Only the final amount of the agreement between Google Europe and Her Majesty’s Revenue & Customs has been disclosed. Some British politicians say they are not happy with this and suspect that the 170 million euros is too low an amount.

Update, 14:47: Google’s 2013 revenue was incorrectly labeled as profit. This should also be EUR 4.6 billion and not EUR million. The article has been edited. These amounts have been converted using the GBP to EUR exchange rate on December 31, 2013.