Google's executive chairman Eric Schmidt defended his company's payment of a mere £6.09 million (A$9.06m) in UK corporation tax for 2011 on a turnover of £395 million and said his firm's management of its tax bill was not very different from British firms in the US market.
Speaking to BBC Radio 4, Schmidt said Google had invested heavily in the UK as a corporate citizen. "UK has been a very good market for us. 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 UK, which is driving a lot of economic growth for the country," he said.
He rejected insinuations from the UK Public Accounts Committee (PAC) and its chairperson MP Margaret Hodge who described Google, along with many other multinationals employing tax avoidance measures, as "immoral".
Later on, in an exclusive interview with CFO World, Hodge also said that policymakers were guilty of being too timid in taking any domestic action against the likes of Google to enforce or increase corporate tax takings fearing it would lead to an exodus of capital, talent and investors.
"What was once black and white when it came to tax regulations has of late become grey. The likes of Google may ask at what point is there a moral obligation to pay more tax than their legal requirement under our existing framework. I am on the other side of the argument, asking that very question on taxpayers' behalf," she told CFO World. (To read the full interview click here)
However, Schmidt said Google's behaviour reflected the way all major multinational companies, including his firm's British peers, manage their taxes.
"The same is true for UK firms operating in the US, for example. 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," he said.