Google paid $55m in UK corporate tax over $5bn sales last year

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by CBR Staff Writer| 02 October 2013

Paid a tax rate of 2.6% on $8.1bn in non-US income

Google has paid $55m in corporate tax in the UK for 2012 sales of nearly $5bn, amidst criticism in the country that tech giants are paying less tax.

The search engine firm, which was twice probed in 2012 by a parliamentary committee over its tax practises, has paid a tax rate of 2.6% on $8.1bn in non-US income during the year, after channelling all its foreign earnings to its Bermuda-based affiliate.

Google claims that it complies with all tax rules in every country, and says it pays less tax in the UK because its profits are not generated by its UK employees.

Google UK, and its other subsidiaries across mainland Europe, have been paying smaller sums of tax because they are assigned as marketing services providers to Google Ireland.

In June, the UK Public Accounts Committee (PAC) revealed that Google has been evading paying corporation tax and the firm's status would be restored only if it sets up a corporate structure to pay tax for the generated profits.

However, Google's executive chairman Eric Schmidt stated that the attempts to force technology firms to pay more tax would hinder innovation.

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