UK Upset About Google's Small Tax Payment, Google Says It Did Nothing Wrong
April 23, 2013 2:06 PM
comment(s) - last by
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.
This article is over a month old, voting and posting comments is disabled
RE: Google Didn't Write your Tax Code
4/23/2013 8:22:37 PM
Agreed! Personally, I find it odd to even have a corporate income tax, always seemed to be double taxation between capital gains tax on dividends and corporate income tax.
RE: Google Didn't Write your Tax Code
4/26/2013 5:36:40 AM
It's not really double taxation. Your share price will reflect the deduction from profit of tax before it becomes subject to capital gains so it's something of a smoothing approach - get predictable income without relying on volatile markets or long term holdings which aren't generating regular tax income.
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