Google's UK Tax Bill For 2011 Defended By Executive Eric Schmidt
April 22, 2013

Google’s UK Tax Bill For 2011 Defended By Executive Eric Schmidt

Peter Suciu for — Your Universe Online

There are two things in life you can´t avoid — death and taxes. As many Americans filed their yearly income tax last Monday it is just proof that it is all but unavoidable. Just as many individual filers look for loopholes in the tax code as do large multinational corporations. But the question that comes up is just how “legal” some of those loopholes might be, given what a large company ends up paying in taxes.

In many cases these loopholes in the tax code can leave companies with tax burdens that many believe seems “light” - or at least less than what could be argued is a fair share. In austerity-hit Britain, which is still in recovery from the 2008 global economic downturn, some in the government have questioned the taxes paid by large companies.

Google on Monday defended its $9 million US tax liability in the United Kingdom for 2011. This is a response to a committee of MPs (Ministers of Parliament) questioned last year on how many multinational companies could pay so little on UK earnings, in which one committee member called it “immoral.”

The Public Accounts Committee (PAC) has accused companies such as Google, Starbucks and Amazon of “using the letter of tax laws” to “immorally minimize their tax obligations” reported The Telegraph.

Google, along with many other multinational companies has come under close scrutiny in several European nations as cash-strapped governments have raised concerns that that these corporations aren´t paying their respective tax liability.

British lawmakers raised alarms that Google was acting in an “immoral” way during a committee grilling of Matt Brittin, the chief executive of Google UK. Conservative MP Charlie Elphicke questioned Google´s tax burden on 2011 revenues that exceeded $3.8 billion US.

In his testimony to the PAC last year, Brittin insisted that Google had complied with UK law.

However, committee chairman Margaret Hodge, of the Labour Party, responded, “We are not accusing you of being illegal, we are accusing you of being immoral,” reported The Guardian.

According to AFP, Google´s CEO Eric Schmidt fired back in an interview with BBC Radio 4´s World at One on Monday, noting that the search giant has more than 2,000 employees in the UK and that the company has invested heavily in Great Britain.

“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,” Schmidt told the BBC.

“The same is true for British firms operating in the US, for example,” Schmidt added. “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.”

The PAC is appointed by the House of Commons to examine “the accounts showing the appropriation of the sums granted to Parliament to meet the public expenditure, and of such other accounts laid before Parliament as the Committee may think fit.”