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George Osborne insists Google tax deal was 'good news'

Published 25/05/2016

George Osborne insisted Google's agreement to pay £130 million in tax was
George Osborne insisted Google's agreement to pay £130 million in tax was "good news"

George Osborne has again insisted Google's agreement to pay £130 million in tax for 10 years of UK operations amounts to "good news".

The Chancellor defended the settlement with HM Revenue and Customs but Labour described it as a "cosy deal" when compared with the French pursuit of taxes from the US internet giant.

It has been reported that 100 French investigators entered Google's Paris office in a dawn raid on Tuesday as Google stands accused of "aggravated tax fraud".

France is chasing £1.3 billion in back taxes and penalties from Google, according to reports.

Shadow business secretary Angela Eagle compared the two approaches as she and Mr Osborne stood in for David Cameron and Jeremy Corbyn at Prime Minister's Questions.

Ms Eagle said: "Given the overnight news of the French authorities' dawn raid on Google, investigating allegations of aggravated financial fraud and money laundering, do you now regret calling your cosy little tax deal with the same company 'good news for the British taxpayer'?"

Mr Osborne replied: "It is good news that we are collecting money in tax from companies that paid no tax when the Labour Party was in office.

"And you seem to forget that you were the exchequer secretary in the last government so perhaps when you stand up you can tell us whether you ever raised with the Inland Revenue at the time the tax affairs of Google?"

Ms Eagle defended her time in government, saying her role was to deal with taxes on vices, while attacking the Government for cutting HMRC staff.

But Mr Osborne highlighted his so-called ''Google tax'' which targets firms that move their profits overseas.

The ''diverted profits tax'' is designed to discourage large companies from taking earnings out of the UK to avoid tax.

Multinationals such as Google tend to base their European subsidiaries in Ireland or other low-tax jurisdictions such as Luxembourg to shift profits to countries where they pay less tax.

Following the Paris raid, Google said: "We comply with the tax law in France, as in every other country in which we operate. We are cooperating fully with the authorities in Paris to answer their questions, as always."

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