Google Avoids Paying $1.6 Billion USD In Taxes, UK PM Speaks Out
January 2, 2013 11:32 AM
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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)
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
blamed Apple for dodging billions in taxes
in a lengthy article last year.
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RE: two faced
1/2/2013 1:37:06 PM
I think politicians, especially those putting themselves forward to be a head of government, should treat themselves as a particularly special case. They should make absolutely sure, right at the beginning of their political career, to pay all due taxes and to avoid all tax avoidance schemes, legal or otherwise. Paying taxes like this would not be a sign of stupidity or lack of financial savvy - it is a demonstration of good moral compass. Mr Romney was not technically in the wrong, but it was not very clever nor impressive on his part.
Government is not about "doing business", it is about defining and providing a social infrastructure; part of which is enabling business to operate such that both companies, and the wider society of which they are a part, can flourish in a fair and sustainable way.
As for international corporations: they are often offered all sorts of tax breaks to set up business in a given country. The onus should quite rightly be on the law makers to close loop holes of which they do not approve and to define the rules under which they wish business to operate.
"Intel is investing heavily (think gazillions of dollars and bazillions of engineering man hours) in resources to create an Intel host controllers spec in order to speed time to market of the USB 3.0 technology." -- Intel blogger Nick Knupffer
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