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Google only paid £6 million ($7.8 million USD) in UK corporation tax

The United Kingdom isn't happy with Google's corporate tax record, but executive chairman Eric Schmidt said that Google is responsible for significant economic growth in the country.

The UK has said that it is "immoral" for multinational companies like Google to pay such low taxes on their earnings in the UK. Leaders in the UK, France and Germany have all called for a way to stop profit shifting by multinationals, which is used to dodge taxes.

The UK is especially concerned with the fact that Google only paid £6 million ($7.8 million USD) in UK corporation tax. 

Google executive chairman Eric Schmidt defended his company's tax record, saying that Google has complied with the law and has even helped stimulate growth in the UK.

"Britain has been a very good market for us," said Schmidt. "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."

"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."

Back in January of this year, Google was criticized for skipping out on paying about £1 billion ($1.6 billion USD at the time) in UK taxes. It did this by funneling a large portion of its global revenue through the island of Bermuda. 

Google sent £6 billion through Bermuda over the course of 2012, which halved its 2011 tax bill. In fact, Google funneled 80 percent of its global revenue through the island and ended up paying about £1 billion less to the government.

“I do believe we all have a common interest in being able to tell our taxpayers who work hard and pay their fair share of taxes that we will make sure others do the same,” wrote UK Prime Minister David Cameron in an open letter to the G8.

Schmidt defended Google at that time as well. 

“We pay lots of taxes; we pay them in the legally prescribed ways,” said Schmidt. “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.”

In April of last year, it was reported that Apple made $9.5 billion USD in Britain for 2011, but only paid 0.16 percent in taxes. Amazon was also targeted for its headquarters in the tiny European Union nation of Luxembourg and Google's placement in Ireland with subsidiaries in the Caribbean and Luxembourg for more tax dodging gains.

Source: BBC News

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legal loophole
By Nortel on 4/23/2013 2:10:38 PM , Rating: 2
I think this article begs the question: "Why don't they just shut down that loophole in the law?"

RE: legal loophole
By haukionkannel on 4/23/2013 2:32:45 PM , Rating: 2
Because the company would move to the other country with the same loophole intact... So they hope that company would not use that loophole, but are not willing to close it...
So it is easy to say that nations have multi personality disorder synthoms :-)

RE: legal loophole
By Flunk on 4/23/2013 3:35:49 PM , Rating: 2
That isn't true, there are already countries with a lot more legal loopholes than the UK. A lot of large corporations in the USA for example, pay almost no corporate tax at all.

The fact that the UK is complaining about this at all is very different from many other countries.

RE: legal loophole
By Hakuryu on 4/23/2013 2:52:01 PM , Rating: 5
Because the politicians that made the tax laws are often on the boards (or will be offered a position later), have a huge chunk of stock, and/or receive a ton of money for re-election bribes from these companies. You don't bite the hand that feeds you.

RE: legal loophole
By TakinYourPoints on 4/23/2013 5:27:45 PM , Rating: 3
Yup. The very wealthy will keep gaming the system so that it benefits them. Doesn't matter if they have a liberal or conservative label on them, its all the same nonsense.

RE: legal loophole
By nafhan on 4/23/2013 6:17:55 PM , Rating: 5
"Our laws suck! Let's find someone to blame!"
--British lawmakers (really, every lawmaker, ever)

Keep in mind a politicians job is to get re-elected. Raising a big stink over something they have no intention to change may get them closer to their goal (re-election) then getting meaningful things done.

RE: legal loophole
By Aloonatic on 4/24/2013 7:06:26 AM , Rating: 4
It depends on the loophole.

The chancelor (guy in charge of the budget/taxes etc) tred to close a loophole in the UK a while ago where people would give money to charities as a way to avoid paying taxt, by limiting hte amount they could give.

Then there was a backlash from the public, so he stopped it.

A few weeks later a well known British Comedian was found to have been paying hardly any tax and everyone was up in arms about it, saying (Tory) politicians let the rich get away with it etc.

How was he doing it?

His accountant was "ddonating" all the comedian's earnings to a "chatritable trust" whch then in turn just happened to "loan" money back to the comedan with zero interest and didnt' intend on every trying to get it back.

In the end, it's easy to blame politicians, but really, ultimately, it's the people who screw each otehr over, and we'd all probably try to get away with paying as littel tax as possible too, same as we would for our companies if we ran our own business or whatever.

RE: legal loophole
By fteoath64 on 4/25/2013 8:23:34 AM , Rating: 2
Yeah, for goodness sake, the G8 can CLOSE the Loop hole and "force" all smaller countries to do the same and be done with it!. But it will NOT be done because the Corporations CONTROL the politicians. Until people wake up to this fact, things will just get worse as the greed and exploitation of corporations goes unchecked and blazoon out of control!.

"And boy have we patented it!" -- Steve Jobs, Macworld 2007

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