Google defends UK tax payments, says good for country

LONDON Mon Apr 22, 2013 9:12am EDT

The Google signage is seen at the company's headquarters in New York January 8, 2013. REUTERS/Andrew Kelly

The Google signage is seen at the company's headquarters in New York January 8, 2013.

Credit: Reuters/Andrew Kelly

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LONDON (Reuters) - Google executive chairman Eric Schmidt has defended his company's low tax payments in Britain, saying the company follows the letter of the law and makes a positive contribution to the British economy.

A British parliamentary committee last year accused Google, Inc and Starbucks Corp of "immorally" minimizing their tax bills. Schmidt rejected the criticism in a radio interview with Britain's BBC.

"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," he said.

Google has UK sales worth billions of dollars each year. But from 2006 to 2011, the last six years for which accounts are available, it reported a net tax credit because tax payments were exceeded by tax credits. These tax assets can be used to offset future profits.

Nonetheless, Schmidt said Google helped drive growth in the British economy. "We empower literally billions of pounds of start-ups through our advertising network and so forth," he told the BBC.

"And we're a key part of the electronic commerce expansion of Britain, which is driving a lot of economic growth for the country."

In a response to public anger over the issue, the British government is leading an international push to reduce profit-shifting by international companies.

(Reporting by Tom Bergin; Editing by Mark Heinrich)

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Comments (2)
HCaulfield wrote:
Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.

-Learned Hand

Apr 22, 2013 10:24am EDT  --  Report as abuse
Potatoe1 wrote:
It is a simple stunt, but only large multinationals con do it. You just shift all your costs to high tax countries (where it will be a tax write-off)and shift all your profits to low tax countries. If the operation in the high tax country needs some of that money that is OK as it will be written off as an operating expense. As an individual I cannot do this as I need most of my money to operate, (pay my bills and other expenses that I cannot write off), that means I cannot afford to have money elsewhere like a huge multi-national corporation can.

Apr 22, 2013 1:19pm EDT  --  Report as abuse
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