Google Isn’t Paying the ‘Google Tax’

Close to four years ago, Europe began to notice that some of the world’s biggest technology companies were paying minimal tax on the billions of dollars they earned across the continent. Among those the U.K. and other governments criticized was Google. Despite the years of debate since, analysis of the search giant’s newly available securities filings shows that over the past three years, the effective tax rate on its non-U.S. profits has remained in the single digits—about 7 percent.

In a Feb. 11 hearing with Parliament’s public accounts committee, Google tax chief Tom Hutchinson and Matt Brittin, head of European operations, argued that Google shouldn’t be coughing up more than the $185 million in back taxes it agreed to pay following a six-year government audit. Hutchinson said his company pays close to the 20 percent corporate income tax Britain requires, which is true if you look only at the tiny sliver of profits recorded in the U.K. “We are paying the right amount,” he said. He got laughs. (Google declined to comment for this story.)