article: Since George Osborne applauded Google's tax agreement with HM Revenue & Customs (HMRC) two weeks ago, public sentiment has been mounting against what many feel are unduly favourable tax arrangements for the world's multinationals. In front of MPs, Google's president for Europe, Matt Brittin defended the company's UK tax arrangements. Its public stance has been that: "Governments make tax law, the tax authorities independently enforce the law, and Google complies with the law." In which case, the authorities in the UK and beyond seem to be concluding that what's required is a change in the law. Chancellor George Osborne has already instigated a clampdown on the way multinationals shift their profits to different jurisdictions to pay less tax, known as the "diverted profits tax". HMRC has said that the new tax, which came into effect in April last year, is aimed at capturing tax from organisations that don't pay corporation tax on their profits in the UK. Google, says HMRC, has paid the taxes that it is supposed to pay. Which, say critics, suggests this new tax doesn't go far enough. Last month, the Organisation for Economic Cooperation and Development (OECD) successfully brokered an agreement designed to improve the current system. All 31 of its member countries, which include the US, Bermuda and Guernsey, have agreed to share information on the tax international firms pay, leaving them less room for moving their profits into low tax jurisdictions. But the plan would still require implementation at national level. At the heart of the agreement is the concept of transparency, in particular what is known as "country-by-country reporting". This would force companies to tell the tax office of each country in which they operate, how many staff they employ there, what their revenues and profit are and how much tax they pay. The European Commission has proposed EU member states do the same. If its plan is approved, which experts say is unlikely as any direct tax measures require unanimity, it could eventually be turned into law by individual countries. The Commission has said it is also looking separately at whether these accounts should be opened up to public scrutiny and will publish its findings in the spring. If such scrutiny were ever implemented, it could be a powerful incentive for firms to change, says Richard Murphy, professor of international political economy at London's City University. "If multinationals feel that they are out of the public eye, then they feel they can carry on the same way with the tax authorities - and nothing changes. "It is only by having their affairs in the public eye, when everyone can see the choices they are making and the press can have a field day, that you have behavioural change." The prospect is already making investors nervous, according to Prof Murphy: "Investors are crucial to this. They are beginning to question which companies are free-riding. If there is public scrutiny of their accounts that represents a real risk, it could result in a real change in perception of those companies." Momentum appears to be building behind
summary: When Google's European boss, Matt Brittin, appeared before the House of Commons' Public Accounts Committee on Thursday he faced a wave of indignant questioning from MPs.