FEW subjects are as bloodless as the ins and outs of corporate tax—until they provide an opportunity to accuse a politician of coddling big business. George Osborne, the chancellor of the exchequer (Britain’s finance minister), got his critics’ blood up this week by hailing as a “major success” a deal in which Google agreed to cough up £130m ($185m) in back payments for 2005-15, in addition to the roughly £120m it had already paid. Almost everyone else, including bigwigs from his own Conservative Party, was scathing.
Tax authorities, particularly in Europe, have been stepping up efforts to claw back lost tax amid growing public anger over companies’ energetic tax avoidance. The main targets are technology giants, which have become masters at cutting their tax bills by shuffling intellectual property and profits to tax havens. In addition, governments around the world are implementing a raft of anti-avoidance measures proposed last year by the OECD. But as the Google kerfuffle shows, trying to look tough can backfire.
A ten-year bill of £250m looks light for a company whose revenue from British advertisers was...Continue reading
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