Government // Leadership
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4/22/2013
11:45 AM
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Google To U.K.: Don't Snipe About Our Tax Rate

Google CEO dismisses complaints of low corporate taxes, says Britain should be grateful for the economic boost the company provides.

Google CEO Eric Schmidt thinks the U.K. should be grateful to his company for helping its economy -- not sniping at it for paying so little in corporate taxes.

Schmidt told listeners of the BBC Radio 4 news program "World At One" on April 19, "We [have hired] more than 2,000 employees and are investing heavily in Britain. We empower literally billions of pounds of startups 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."

Google paid £6 million ($9 million) to the government in taxes on its local profits in 2011.

"Britain has been a very good market for us," Schmidt said, pointing out that his company's taxation is no different from British firms operating in the U.S. "The most important thing to say about our taxes is that we fully comply with the law, and should the law change, we'll comply with [such changes] as well."

[ Would you trust your taxes to the cloud? Read U.K. Accounting Software Supports Tax Filing Via Cloud. ]

Last year British lawmakers won headlines for what amounted to a mini-campaign against the alleged ducking of local tax obligations by many large companies, including Starbucks and Google. For many Brits, this was crystallized in a set of exchanges between representatives of a number of these firms and the House of Commons Public Accounts Committee. The Committee claimed these corporates were "using the letter of tax laws both nationally and internationally to immorally minimize their tax obligations."

Matt Brittin, CEO of Google's British arm, told the Committee his firm had not breached its famous "Don't Be Evil" tagline, to which Committee chairwoman Margaret Hodge MP responded, "We are not accusing you of being illegal; we are accusing you of being immoral."

Schmidt clearly sees no cause for the fuss, pointing out, "The fact of the matter is these are the way taxes are done globally."

Still, the issue is on the minds of many European politicians. British Chancellor George Osborne has expressed interest in setting up international agreements to limit tax evasion, although he also cut corporate tax rates by 5% recently in an effort to entice more companies like Google to invest in the U.K.

For his part, Schmidt has expressed interest in expanding Google's global reach. During a recent trip to the Democratic People's Republic of Korea, Schmidt tried to persuade his hosts to allow more Internet openness as a way of making the country more of a "proper country."

"North Korea is by far the most isolated country on earth," he said. "There's essentially no Internet access. There are roughly a million mobile phones, but they don't even have the basic capability of browsing, so the average North Korean person is completely cut off from any of the kinds of conversations or knowledge that's going on globally."

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