GOOGLE’S chairman has defended the web giant’s controversial tax policies, pointing to the effect the firm has on wider growth.
The firm has been criticised for the way it manages taxes, including a dressing down by the government’s public accounts committee, but Eric Schmidt was defiant yesterday, saying Google complied with UK law.
“We empower literally billions of pounds of start-ups through our advertising network and so forth,” Schmidt 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.”
Google paid £6m in UK corporation taxes in 2011, the last set of available accounts, despite seeing sales of $4bn (£2.6bn), due to an arrangement in which it transfers revenues to subsidiaries based elsewhere.
The arrangements, which are used by many other international firms, have been criticised by politicians both in the UK and abroad, who have promised new arrangements to encourage firms to pay tax in the countries that their revenues comes from. Schmidt said that Google would be happy to comply if the law shifted, but that the company’s arrangements were not unusual.