It’s become clear that ‘everyone’s at it’ with avoiding corporation tax, even if most firms are not brazen enough to come out in defence of their financial arrangements. But that doesn’t seem to faze executive chairman of Google, Eric Schmidt, who has stood up for Google’s piffling £6m payment back in 2011.
In an interview with BBC Radio 4’s World At One programme, he took the opportunity to argue that British multinationals with operations in the US were using similar tax arrangements, and said he felt that more attention should be paid to the business enabling that Google offers in the UK.
Schmidt’s comments come after a the Public Accounts Committee of MPs denounced companies for ‘using the letter of tax laws’ to find ways of ‘immorally [minimising] their tax obligations.’ He said that the £6m Google paid in UK corporation tax back in 2011 complied with all applicable tax laws and iterated that the company’s arrangements are similar to scores of other companies.
He said: ‘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 company.’
Schmidt’s comments come against a backdrop of criticism for large multi-national corporations, which funnel their profits out of the UK to more hospitable tax environments, allowing them to pay less corporation tax. Others in the firing line for such arrangements have been eBay, Amazon, Facebook and Starbucks.
It emerged over the weekend that Google managed to avoid a load of tax (to the tune of hundreds of millions of dollars) in the US by making use of a new tax break introduced the encourage innovation, as well as the routine use of farming profits out to lower-tax countries.
In reference to other firms, Schmidt said: ‘The fact of the matter is these are the way taxes are done globally…I think the most important thing to say about our taxes is that we fully comply with the law and we’ll obviously, should the law change, we’ll comply with that as well.’
To read more from MT on why there's no point chasing the multi-nationals for tax, click here...