Google’s executive chairman Eric Schmidt has defended the company’s tax arrangements, saying Google is a key part of electronic commerce expansion in the UK.
The company, which paid only £6m in corporation tax in 2012 on revenues of £395m, is among several multinationals that have come under fire over tax payments.
Google has paid what seems a small figure for a number of years to the UK government, with just a £935,000 tax bill on £239m revenues in 2011 and a total of £8m between 2004 and 2010.
Earlier this year, the Public Accounts Committee (PAC) accused Google, Starbucks and Amazon of "using the letter of tax laws both nationally and internationally to immorally minimise their tax obligations".
At the weekend, Schmidt told the BBC Radio 4 that the PAC report omitted the fact that Google also hires more than 2,000 employees and is investing heavily in the UK.
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Google empowers billions of pounds of start-ups through its advertising network and is a key part of the electronic commerce expansion of the UK which is driving a lot of economic growth, he said.
Schmidt said Google’s tax arrangements comply with the way taxes work globally, which also applies to UK firms operating in the US.
But, according to the Guardian, when Google UK chief Matt Brittin told the PAC last year that it was fully compliant with the law, committee chairman Margaret Hodge said: "We are not accusing you of being illegal, we are accusing you of being immoral.”