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Google’s executive chairman Eric Schmidt has defended the firm’s UK tax payments, claiming it operates within the law and is responsible for “billions” of spend in the country.
Google has been hit by accusations in the past that it has acted in an “immoral” way by dodging much of its corporation tax, taking advantage of tax loopholes. The same charge that has been levelled at numerous corporations such as Starbucks and Amazon.
The Public Accounts Committee (PAC) claimed Google paid just £6m in corporation from revenues of £396m in a report on the issue published in December 2012. Last week Google reported a rise in profits of 31 percent to almost $14bn.
However, speaking on the BBC World at One show, Schmidt said that questions around the firm’s taxes missed the wider pictures of the impact of Google on the UK economy and the fact the way corporation tax is paid is no different to anywhere else in the world.
“Britain has been a very good market for us. We empower literally billions of pounds of start-ups through our advertising network and so forth. And we're a key part of the electronic commerce expansion of Britain which is driving a lot of economic growth for the country,” he said.
"So from our perspective, I think you have to look at it in totality. You're describing the way taxes work globally. And the fact of the matter is these are the way taxes are done globally. The same is true for British firms operating in the US, for example.”
Schmidt added that nothing Google does is illegal and it would always operate above board.
"I think the most important thing to say about our taxes is that we fully comply with the law and obviously, should the law change, we'll comply with that as well,” he added.
Google has also been accused of other tax issues in the past, with a report in December last year in Bloomberg claiming the firm shifted $9.8bn in revenue to Bermuda in order to avoid paying $2bn in global taxes.
Dan Worth is the news editor for V3 having first joined the site as a reporter in November 2009. He specialises in a raft of areas including fixed and mobile telecoms, data protection, social media and government IT. Before joining V3 Dan covered communications technology, data handling and resilience in the emergency services sector on the BAPCO Journal.