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David Cameron, the Prime Minister of the UK, said that companies like Google are immorally minimizing tax bills

Google has managed to skip paying about $1.6 billion USD (£1 billion) in taxes by way of the island Bermuda -- and the Prime Minister of the United Kingdom isn't happy.

Google sent £6 billion through Bermuda over the course of last year, which halved its 2011 tax bill. In fact, Google funneled 80 percent of its global revenue through the island and ended up paying about £1 billion less to the government.

Google's Executive Chairman Eric Schmidt said this "is called capitalism."

“We pay lots of taxes; we pay them in the legally prescribed ways,” said Schmidt. “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.”

David Cameron, the Prime Minister of the UK, said that companies like Google are immorally minimizing tax bills and need to be stopped. He even wrote a letter to fellow leaders of the G8 requesting a global crackdown on tax avoidance for large companies such as Google and Starbucks.

“I do believe we all have a common interest in being able to tell our taxpayers who work hard and pay their fair share of taxes that we will make sure others do the same,” wrote Cameron in an open letter to the G8.

Google's UK Head Matt Brittin said politicians are the ones who set tax rates, and that Google is playing by their rules.

Google funneled £2.6 billion of British revenue through Bermuda, which cut its UK tax bill by £200 million.

In April of last year, it was reported that Apple made $9.5 billion USD in Britain for 2011, but only paid 0.16 percent in taxes. Amazon was also targeted for its headquarters in the tiny European Union nation of Luxembourg and Google's placement in Ireland with subsidiaries in the Caribbean and Luxembourg for more tax dodging gains.

The New York Times then blamed Apple for dodging billions in taxes in a lengthy article last year.

Source: Business Insider

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By lyeoh on 1/2/2013 11:48:05 AM , Rating: 2
I find it interesting that Google etc can transfer profits around, but you can't transfer text books around and resell them:

RE: Capitalism
By Dr of crap on 1/2/2013 12:06:10 PM , Rating: 3
Maybe if we ALL declared ourselves businesses we could get by with paying less taxes as well, by having a direct deposit check go to some bank in Bermuda.

RE: Capitalism
By hubb1e on 1/2/2013 1:51:00 PM , Rating: 2
Sure, go ahead and do it. If you know enough about tax law then you can find ways to pay less taxes. But most people don't know tax law, and for most the amount you save is not worth hiring someone to do it. If an accountant can save a guy who paid $10 million in taxes, 1% of his tax burden and it only cost $5000 for the accountant, then that's a $95K win for that guy. If you hired that accountant for $5000 and he saved you 1% of your tax burden, you'd be out $4900.

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