Tue, Apr 23, 2013 - Page 15 News List

Google executive defends controversial UK tax bill

AFP and Bloomberg, LONDON

A top Google executive yesterday insisted that the company’s “key” role in developing Britain’s electronic commerce sector should be taken into account in the row over its controversial tax arrangements.

According to figures cited by Conservative Member of Parliament Charlie Elphicke, Google paid only £3.4 million (US$5.4 million) in British corporation tax in 2011 on revenues totalling about £2.5 billion, sparking fury in austerity-hit Britain.

However, Google’s executive chairman Eric Schmidt told BBC Radio 4’s World at One program the company had not acted illegally and had contributed significantly to Britain’s economic growth.

Defending the company’s tax bill, he said: “Of course that omits the fact that we also hire more than 2,000 employees and are investing heavily in 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,” he said.

Schmidt urged critics to consider the “totality” of the Internet giant’s contribution to the economy.

“The fact of the matter is these are the way taxes are done globally,” he said. “I think the most important thing to say about our taxes is that we fully comply with the law.”

Google has come under closer scrutiny in several European nations where cash-strapped governments are increasingly wary of being shortchanged on tax revenue.

Separately, Germany’s finance industry regulator Bafin will examine the businesses that banks conduct in states known as tax havens as part of efforts to crack down on tax evasion.

Companies will have to say why they operate in those markets and who they work with, Raimund Roeseler, head of banking supervision at Bafin, said in an interview in newspaper Sueddeutsche Zeitung. Sven Gebauer, a spokesman for Bonn-based Bafin, confirmed the comments.

Leaked documents reported in newspapers including the Guardian concerning more than 120,000 offshore businesses and trusts have put the spotlight on tax havens such as the Virgin Islands and the Bahamas.

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