Alphabet Inc (NASDAQ:GOOGL)’s Google will face UK government officials next week to discuss the controversial Irish tax, and the company is also expected to be grilled on why its employees in Ireland receive lower salaries than their counterparts in London.
It has been revealed that Google pays its staff in London more than twice the average salary that is paid to its employees in Ireland. The average salary paid to the London staff is £160,000 while the average paid to those working in Ireland is £72,000. The disparity in the salaries has been viewed as unfair especially considering that the UK division in Ireland made sales worth £5.0 billion from advertising in 2015.
Google officials will, therefore, have to account for their relationship with the London Sales team, keeping in mind that the UK acquires its advertising solely from the Irish division. This is also in line with a statement made by Google’s head of sales in the Europe, Matt Brittin, who stated that advertisers are encouraged to purchase advertising from the search group. However, they always acquire advertising from the team in Dublin.
The facts, therefore, raise a lot of questions as to why there is inequality in the salaries. The company’s division in Ireland has three directors whose total salaries amounted to £1,265,000 in 2014. The team also registered sales worth £14bn in the same year, making up a third of the firm’s total global sales.
The Ireland Division also believes that it is a global leader in technology, and its revenue is generated by giving cost efficient and relevant advertising. Mr. Brittin is expected to address the Public Accounts Committee on Thursday to discuss Google’s tax matters. This is the third time the meeting will be held, and the MPs are particularly interested in finding out how the £130m tax settlement was arrived at with the HM Revenue & Customs (HMRC) in January. The meeting seeks to terminate a tax dispute that has been in existence for the last ten years.