Google chief executive Sundar Pichai warns the UK's go-it-alone plans to tax tech firms are doomed to fail
Google chief executive Sundar Pichai warns the UK's go-it-alone plans to tax tech firms are doomed to fail and claims only a multilateral approach via the OECD will work
- The tech chief said individual nations cannot act alone to curb Silicon Valley
- The OECD has been drawing up plans but has been criticised for slow progress
- Frustrated by the OECD, Britain and France have started their tax plans
- European Commission's Margrethe Vestager warned the EU will also press ahead
Google's chief executive has warned the UK's unilateral plans to tax tech firms are doomed to fail.
Sundar Pichai, 47, said individual nations cannot act alone to curb the huge Silicon Valley companies and unilateral taxes are 'not sustainable' and would unravel.
He believes a multilateral approach with the Organisation for Economic Co-operation and Development (OECD) is the solution.
The intergovernmental body is already discussing plans to fairly tax big tech firms but progress has so far been slow.
Pichai told The Telegraph: 'If there are unilateral actions… I just think it's not sustainable. We are strong believers in the OECD process.'
On Friday, European Commission vice-president Margrethe Vestager warned the EU will press ahead with its own tax plans if the OECD fails to agree a deal before January 2021.
She said: 'If no effective agreement can be reached by the end of 2020, the EU should be willing to act alone.'
Vestager has already levied fines on the company worth £7.5billion but many believe this is nowhere near enough.
Frustrated by the lack of progress by the OECD, Britain and France have started drawing up plans to act unilaterally with their own digital services tax.
But Pichai said: 'To me it's a multilateral trade issue which countries have to resolve and guide multinational companies.
'If the OECD arrives at the new framework and it's consistent for everyone we would gladly comply and that's our role as a company, participating in society.'
Last year, Google's tax bill in Britain rose to £67million after a £45million increase in profits.
The tech giant employs more than 4,000 people in Britain but it has consistently been criticised for not paying enough tax, along with other US companies such as Amazon and Apple.
In May, the OECD announced plans for 'resolving the tax challenges arising from the digitalisation of the economy', and vowed to create a 'unified long-term solution' by the end of next year.
But the lack of progress led Britain to publish a finance bill this year agreeing to introduce a two per cent tax on tech companies' revenue by April 2020, according to The New Statesman.
However, the plans have frustrated the US who want a multilateral approach to the tech issue.
Vestager has previously ordered Ireland to reclaim £14billion in tax from Apple.
A recent study by Tax Watch claimed Facebook, Google, Apple, Microsoft and Cisco avoided £5billion in UK taxes in the last five years.
Pichai, who has continued Google's rise since taking over in 2015, has overseen profits of £12billion in the first six months of 2019.
Google, whose parent Alphabet is the world's fourth biggest company now boasts a 92 per cent share of the UK search market and a 37 per cent share of the global digital advertising market.
Pichai was paid £1.5million last year and has a personal fortune of around £1billion, says it is not for him to decide if Google is too big a company.
Who is Sundar Pichai?
The future tech wizard was born to a middle class family in Chennai, India.
His father was an electrical engineer for GEC while his mother was a stenographer.
After excelling at school, he won a scholarship to Stanford University, where Google and many other top companies began.
He joined Google in 2004 and worked his way up through the ranks, helping launch Google Chrome.
The father of two, married to Anjali, was appointed chief executive in 2015.
The big cricket fan has since overseen Google's share price double during his reign.
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