Eric Schmidt, executive chairman of Google Inc (NASDAQ:GOOG), defended the low tax payment of the search engine giant in the United Kingdom. He rejected public criticisms that the company is “immorally” minimizing its tax payment in the country during a radio interview with BBC, according to report from Reuters.
Schmidt argued that the company complied with the tax regulations in the country and it is making positive contributions for the British economy.
During the interview Schmidt said, “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, comply with that as well.”
The executive chairman of Google Inc (NASDAQ:GOOG) added that the search engine giant is driving the economic growth of 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,” said Schmidt.
Last year, lawmakers in the United Kingdom accused Google Inc (NASDAQ:GOOG) together with Amazon.com, Inc. (NASDAQ:AMZN), and Starbucks Corporation (NASDAQ:SBUX) with “immoral tax avoidance” after the Parliament’s Public Accountants Committee told the government to impose stricter rules against global companies that abuse tax laws that are taking their revenues in UK other locations offshore.
UK’s tax regulation allows companies with business operations to establish their base in any countries in Europe. Google Inc (NASDAQ:GOOG), and other companies set up their headquarters in the region in countries with lowest tax rates. Google’s main base of operation in Europe is located in Bermuda and Ireland.
The executives of Google Inc (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN), and Starbucks Corporation (NASDAQ:SBUX) faced the inquiry of the Public Accountant’s Committee in November last year to find out if the companies are paying fair taxes in UK amid the economic crisis in the European region.
A previous report said that the search engine giant saved around $2 billion in income taxes last year after the company sent $10 billion in revenue to its shell company in Bermuda because the company has no income tax. Google Inc (NASDAQ:GOOG) had been practicing its tax strategy for many years. Its tax strategy is interestingly referred to as the “Double Irish” and “Dutch Sandwich.”
Google Inc (NASDAQ:GOOG) generates billions of dollars of revenue in the UK. According to Reuters, the company reported net tax credit from 2006 to 2011 because its tax payments were exceeded by tax credits.