E.U. could investigate UK’s ‘derisory’ $185 million Google tax deal

LONDON (by James Davey, Reuters) — The European Union could investigate a back tax deal agreed by Internet group Google and Britain, its competition boss said on Thursday.

The 130 million pounds ($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.

European Competition Commissioner Margrethe Vestager told BBC Radio she would be willing to probe Google’s tax arrangements with Britain.

“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 agrees we should pay, including 130 million pounds in additional back tax,” Peter Barron, Google 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.

The Commission is preparing to announce measures designed to prevent tax avoidance by multi-national companies.

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.

(Reporting by James Davey; editing by Guy Faulconbridge)