New blow for government and Google as MEPs request Commission investigation into tax deal

googleMolly is one of five Green MEPs who have responded to EU Competition Commissioner Vestager’s challenge yesterday to write to her if they believe the Google tax deal needs investigating. The MEPs, all members of the European Parliament’s tax committee, have written to Commissioner Vestager asking her to officially launch an investigation under state aid rules, and use powers under EU law to request additional information about the tax deal from the UK government.

This is a further blow to the government and to Google who last weekend announced agreement on the payment of £130m in back taxes. Google already face a grilling from MPs within weeks after they agreed to appear before the Commons public accounts committee and the government have been under increasing pressure to release full details of the deal.

Molly has been highly critical of the Google deal [1]. She said:

“This agreement, for a derisory £130 million tax out of £6.5bn revenue, may well constitute illegal state aid, by providing economic advantage for Google. This is likely to have an effect on competition with other companies, having a particularly negative impact on SMEs, and may affect trade between the UK and its other European partners.”

The challenge comes in a week when the European Commission have launched a new tax package aimed at curbing corporate tax avoidance. Molly welcomed the plan, but believes it needs to go further:

“I think this package from the Commission demonstrates a serious intention to address the profit shifting which is at the heart of the problem. I applaud the attempt to achieve greater transparency in tax matters in order to ensure accountability by companies and politicians. But we need to have public country-by-country reporting so that we can know where companies are creating value and therefore how much tax should be paid. The Google fiasco demonstrates how vital it is that there is stronger cooperation and coordination at EU level to prevent Member States acting out of self-interest.”


[1] Molly has also had two articles published on the Google tax deal:

New Statesman: Google’s deal with the government shows where power really lies

Huffington Post: A Tax Package to Keep Us One Step Ahead of Google