UK Upset About Google's Small Tax Payment, Google Says It Did Nothing Wrong
April 23, 2013 2:06 PM
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Google only paid £6 million ($7.8 million USD) in UK corporation tax
The United Kingdom isn't happy with Google's
corporate tax record
, but executive chairman Eric Schmidt said that Google is responsible for significant economic growth in the country.
The UK has said that it is "immoral" for multinational companies like Google to pay such low taxes on their earnings in the UK. Leaders in the UK, France and Germany have all called for a way to stop profit shifting by multinationals, which is used to dodge taxes.
The UK is especially concerned with the fact that Google only paid £6 million ($7.8 million USD) in UK corporation tax.
Google executive chairman Eric Schmidt defended his company's tax record, saying that Google has complied with the law and has even helped stimulate growth in the UK.
"Britain has been a very good market for us," said Schmidt. "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 Britain, which is driving a lot of economic growth for the country."
"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, we'll comply with that as well."
Back in January of this year, Google was criticized for skipping out on paying about £1 billion ($1.6 billion USD at the time) in UK taxes. It did this by funneling a large portion of its global revenue through the island of Bermuda.
Google sent £6 billion through Bermuda over the course of 2012, 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.
“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 UK Prime Minister David Cameron in an open letter to the G8.
Schmidt defended Google at that time as well.
“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.”
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.
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RE: Google Didn't Write your Tax Code
4/24/2013 10:14:25 AM
Actually, they are doing something immoral. It may not be illegal, but while law and morale are often correlated, they are not the same thing. A moral action is one that could be copied by every single person without a negative effect for the community. This is not the case with tax evasion / loopholing. If everybody does it, the governments will collapse and it's back to the medieval ages for us. Much good your millions will do you, if the poor part of the city starts to emit marauding bands of bandits.
Google is profiting immensely from government spending. They are using public infrastructure, they have personal and customers educated by public institutions, their whole business model would be impossible without government-funded developments like computers, software, the WWW. Nobody who operates a small farm makes millions of dollars just because he is that good, big companies and well-paid specialists can only exist in todays well connected infrastructure, with its expensive infrastructure and global level of education. Most of all, nobody would give a crap about Googles services while starving, or while about to die from cholera or while being under attack by Vikings. The government can live without Google, but Google would be utterly dead without the society that modern governments have generated in the last 500 years.
And yet Google and other big companies do their best to reduce the government income as much as possible, happily abusing every loophole that some powerful lobby has managed to push through in the last few decades. This is not what "everyone who is not crazy does", it is financial terrorism. I have never attempted to "save taxes" by moving money to other countries. Not because I don't know how or because it would not pay off, I do pay the peak tax rate in Germany. I don't do it because it is indeed deeply immoral and I remember my history lessons well enough to understand what the excessive accumulation of wealth has done to the world-wide economy at a dozen occasions over the last 500 years.
"We are going to continue to work with them to make sure they understand the reality of the Internet. A lot of these people don't have Ph.Ds, and they don't have a degree in computer science." -- RIM co-CEO Michael Lazaridis
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