Why are UKIP lying about Google? 

Since yesterday Ukip have been promoting the idea that the EU is preventing the UK from taxing large corporations such as Google.

This has been posted on their FB page. And shared numerous times on Twitter.  


Is there any truth in it? 

In a word, no, although it is complicated. Companies like Google use a tax avoidance tactic called transfer pricing. It’s not something only EU countries suffer tax loses from. The US is not immune, Such income shifting costs the U.S. government as much as $60 billion in annual revenue, according to Kimberly A. Clausing, an economics professor at Reed College in Portland, Oregon.

What George Osbourne said about the latest EU directive

“This directive, for perfectly understandable reasons it is not the right directive, does not address the transfer pricing issue. The transfer pricing issue has been one of the issues that has caused greatest concern. This is where companies artificially shift profits and therefore can not be taxed on where the economic activity took place that generates those profits took place. It is one of the most complicated areas of the international tax law.”

He did not say, that we would need to leave the EU to deal with it. In fact clearly with the US also losing $60 billion a year it would make no difference.

What is the EU doing?  

This is what they are doing on tax a whole raft of measures to try to prevent large corporations taking advantage of differing tax rates. This excellent PDF gives an overview of what the EU is doing, including how it wants to tackle transfer pricing. 

Specifically Margrethe Vestager is using the substantial clout the EU does have to prevent governments in thrall to big business, like the current crop of Tories, from effectively breaking state aid rules by subsidising big wealthy companies. She can fine Google and others as much as 10% of their global turnover and she us not afraid to tackle these companies. She has already  tackled Google launching formal antitrust proceedings against the company in April last year over accusations that it uses its dominance as a search engine to unfairly privilege Google’s online shopping service over those of its rivals.

Yet again UKIP have told a lie. They know that on our own we would never be able to successfully target these companies, even if our governments were actually prepared to do so. The EU is not preventing us from doing something. We are preventing ourselves from doing anything. 

Why do ukip lie, because they can not be honest about the EU, it might reveal that the only argument for brexit they have is  people’s fears over immigration. 


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s