Google boss: I'm very proud of our tax avoidance scheme
Google's Chairman Eric Schmidt said £2.5 billion tax avoidance 'is called capitalism'
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Thursday 13 December 2012
The head of the internet giant Google has defiantly defended his company’s tax avoidance strategy claiming he was “proud” of the steps it had taken to cut its tax bill which were just “capitalism”.
In an interview in New York Eric Schmidt, Google’s Chairman, confirmed the company had no intention of paying more to the UK exchequer. Documents filed last month show that Google generated around £2.5 billion in UK sales last year but paid just £6m in corporation tax.
The Californian based search giant has also been revealed to have sheltered nearly $10bn of its revenues in Bermuda allowing it to avoid some $2bn in worldwide income taxes in 2011.
But Mr Schmidt said such schemes were legitimate and the company paid taxes “in the legally prescribed ways”.
“I am very proud of the structure that we set up. We did it based on the incentives that the governments offered us to operate,” he said.
The Silicon Valley boss went on to suggest that Google would not turn down the opportunity to draw on the big savings allowed under the law in the countries it operates in: “It’s called capitalism. We are proudly capitalistic. I’m not confused about this.”
He also ruled out following Starbucks in voluntarily handing more money over to the UK Government.
“There are lots of benefits to [being in Britain],” he said.
“It's very good for us, but to go back to shareholders and say, 'We looked at 200 countries but felt sorry for those British people so we want to [pay them more]', there is probably some law against doing that.”
Mr Schmidt’s defiant stance is unlikely to find favour on either side of the Atlantic with both the American and European Governments searching to find ways of forcing “stateless” internet companies such as Google to pay more tax.
The issue will be raised by George Osborne when Britain takes over the chairmanship of the G8 and will also be investigated by the Organisation for Economic Co-operation and Development (OECD).
Last week the Chancellor said he was committed to “leading the international effort” to prevent international companies transferring profits away from major economies, including Britain, to tax havens.
“We will put more resources into ensuring multi-national companies pay their proper share of taxes,” he said. “With Germany and now France, we have asked the OECD to take this work forward and we will make it an important priority of our G8 Presidency next year.”
Tonight Margaret Hodge, chairman of the powerful House of Commons Public Accounts Committee, which recently cross examined Google UK on its tax affairs said Mr Schmidt should be ashamed rather than proud of his company’s tax bill
“For Eric Schmidt to say that he is ‘proud’ of his company’s approach to paying tax is arrogant, out of touch and an insult to his customers here in the UK,” she said.
“Ordinary people who pay their taxes unquestioningly are sick and tired of seeing hugely profitable global companies like Google use every trick in the book to get out of contributing their fair share.
Google should recognise its obligations to countries like the UK from which it derives such huge benefits, and pay proper corporation tax on the profits it makes from economic activity here. It should be ashamed, not proud, to do anything less. ”
- 1 Rihanna 'nude pictures' claims emerge on 4Chan as hacking scandal continues
- 2 Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
- 3 'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
- 4 What are your fingerprint words?
Rihanna 'nude pictures' claims emerge on 4Chan as hacking scandal continues
Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
Jennifer Lawrence: Leaked 4Chan sex video branded 'fake' by users
Jennifer Lawrence 'naked sex video' will be leaked next, threatens 4Chan celebrity photo hacker
Scotland could still declare independence – even without referendum, says Alex Salmond
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
Archbishop of Canterbury admits doubts about existence of God
£16500 - £20000 Per Annum: Clearwater People Solutions Ltd: We are currently r...
£100 - £125 per day: Randstad Education Crawley: KS2 PPA Teacher currently nee...
£40000 - £45000 per annum + pension, healthcare,25 days: Ashdown Group: An est...
£28000 per annum: Ashdown Group: IT Software Application Support Analyst - Imm...