Googlewhack Greets U.K. Lawmakers Searching for Answers on Taxby
Hearing into company's taxes lets Parliament vent outrage
Google Europe president says laws prevent firm paying more tax
A Googlewhack is usually defined as an Internet search that returns a single answer. On Thursday, the Public Accounts Committee of the British Parliament spent 85 minutes whacking Google Inc. executives, and got a single answer, quite a lot.
“The tax rules are complicated,” explained Tom Hutchinson, the company’s vice president of finance, in what became a constant refrain. “I would love to see the system more simple.”
The hearing was the latest in an occasional Westminster series in which extremely highly paid executives from multinational companies are asked rude questions by members of Parliament who earn significantly less. The events generally yield little in the way of new information, but they do allow politicians to vent their outrage.
The subject of this hearing was the 196 million pounds ($282 million) Google has paid in U.K. tax over the last decade, a sum that would have been considerably smaller had officials at Her Majesty’s Revenue & Customs not spent years probing the company’s tax arrangements. The committee still felt this was on the low side.
“We are here for taxpayers in Britain,” Chairwoman Meg Hillier told the men from Google. “Can you hear the huge anger out there?”
Matt Brittin, president of Google’s European, Middle East and African operations, looked empathetic. He could do more than hear the anger. “I understand the anger,” he said. “And understand that people when they see reported that we are paying 3 percent tax would be angry. But we’re not. we’re paying 20 percent tax.”
In what looked more like a bid to get on TV than an attempt to understand international taxation, Hillier took another whack at Brittin, asking him how much he was paid. “It’s a salary, I don’t have the figure,” he replied.
“You don’t know what you get paid, Mr Brittin?” Hillier asked. “Don’t you feel a bit embarrassed by this?”
Brittin, who has worked hard to reach the point where his pay is so high he can’t remember what it is, nevertheless had the decency to look awkward. Or perhaps his embarrassment was genuine, and spurred by the knowledge that his salary is one of the few facts his company’s search engine isn’t able to provide.
David Mowat, a Conservative member of the committee, seemed fascinated by the jargon of tax avoidance. “The Double Irish, the Dutch Sandwich,” he said several times, before asking Hutchinson why such structures were necessary if all Google wanted was a simple international tax system. “Your use of these structures isn’t indicative of that desire,” Mowat observed.
Brittin was challenged about comments from other countries that they hoped to raise more money in tax from Google. "They’re just statements by politicians," Brittin replied, putting the members of Parliament in their place.
Labour’s Caroline Flint wanted to know whether Google executives had ever discussed the company’s tax bill in meetings with government ministers. “I’m sure, given the scrutiny we’ve had, tax will have come up from time to time,” Brittin replied. “It would be surprising if it didn’t.”
In the end, Brittin explained that the public’s problem shouldn’t be with his company at all. It should be with the politicians. “We can’t pay more than we’re required to under the tax system,” he explained. “There isn’t a legal mechanism.”