Google's chairman, Eric Schmidt, has defended the search engine's tax avoidance policies, saying "we fully comply with the law" after paying just £6m in corporation tax in the UK.
Schmidt's comments drew an angry response from a member of the parliamentary public accounts committee (PAC), who accused the company of treating tax payments as a "voluntary act".
In an interview with the BBC, Schmidt defended the fact that Google paid corporation tax of £6m in 2011 despite recording annual revenues of £2.5bn in Britain. He said: "You're describing the way taxes work globally. And the fact of the matter is these are the way taxes are done globally. The same is true for British firms operating in the US, for example."
Schmidt defended Google's tax affairs by pointing to the support that the company gives to startup businesses. He said: "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. So from our perspective you have to look at it in totality."
He added that if the tax system were to change to force Google to pay more tax, "we will comply". He said too that Google employs more than 2,000 people in the UK and is "investing heavily in Britain".
But Fiona Mactaggart, a Labour member of the PAC, which issued ascathing report on the tax policies of Google, the bookseller Amazon and the coffee chain Starbucks, told the Guardian: "It is clear from these words that Google regards payment of taxes as to some extent voluntary.
"All the companies which the PAC have criticised, because they pay less corporation tax than an independent observer would expect, remind us that they pay payroll tax or contribute to the economy in other ways."
Source: The Guardian
