Eric Schmidt "proud" of Google tax avoidance

"It’s called capitalism. We are proudly capitalistic," claims Google chief.

Money

Google chairman Eric Schmidt claims he is proud of the way the firm pays its taxes, despite mounting criticism over the web giant's tax avoidance schemes

Schmidt defended Google's behaviour, claiming the firm is not doing anything illegal and is just using society's rules to its advantage.

"It's called capitalismWe are proudly capitalistic. I'm not confused about this," he told Bloomberg.

"We pay lots of taxes; we pay them in the legally prescribed ways. I am very proud of the structure that we set up. We did it based on the incentives that the governments offered us to operate."

In 2011, Google funneled $9.8 billion in revenue into a Bermuda shell company as part of a global tax avoidance scheme. This helped the web giant to avoid paying out a total of $2 billion in taxes.

In the UK alone, Google generated an annual turnover of 396 million and paid just 6 million to the Exchequer.

Schmidt's comments could result in further pressure being put on Google. Non-profit British activism group, 38 Degrees, set up a petition in August demanding that Google starts paying its proper share of taxes. The petition has almost reached its target of 50,000 signatures.

US coffee chain Starbucks has already bowed to pressure, after it was revealed the company paid no taxes in the UK last year after generating 398 million in revenue. The firm has committed to paying 20 million over the 2013/14 tax years.

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