Print 64 comment(s) - last by BRB29.. on May 30 at 9:56 AM

He said Google pays exactly what it's supposed to pay

The United Kingdom has been looking into the tax-paying practices of large companies, and Google's Eric Schmidt doesn't see the big deal. 

Schmidt, Google's executive chairman, defended Google -- which was criticized for profit shifting and dodging larger tax payments -- saying that the UK should change its tax system if it wants large companies to pay more or less each year. 

"What we are doing is legal," said Schmidt, referring to Google's UK tax payments. "I'm rather perplexed by this debate, which has been going in the UK for some time, because I view taxes as not optional. I view that you should pay the taxes that are legally required. It's not a debate. You pay the taxes.

"If the British system changes the tax laws, then we will comply. If the taxes go up, we will pay more, if they go down, we will pay less. That is a political decision for the democracy that is the United Kingdom."

Earlier this year, it was reported that Google avoided paying about $1.6 billion USD (£1 billion) in UK taxes. Google sent £6 billion through Bermuda over the course of the 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.

David Cameron, the Prime Minister of the UK, said that companies like Google are immorally minimizing tax bills and need to be stopped.

Just last month, the UK openly stated that it was concerned with the fact that Google only paid £6 million ($7.8 million USD) in UK corporation tax. Schmidt defended Google at that time as well, saying that Google "empowers literally billions of pounds of start-ups through our advertising network" and is "a key part of the electronic commerce expansion of Britain, which is driving a lot of economic growth for the country."

Google isn't the only large company under the microscope. Apple is also being questioned for profit shifting, where it made an estimated £6B ($9.50B USD) in Britain last year, but paid only £10M ($15.8M USD) in taxes.  Apple was able to do this because of the British tax code's rule that largely exempts companies based in Ireland from paying British taxes.

Apple CEO Tim Cook offered tax reform proposals to U.S. Congress at a Senate hearing last Tuesday in an effort to bring back foreign earnings to the United States. Furthermore, he's suggesting that this money be invested in research and development and creating jobs in the U.S. 

Source: BBC News

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

RE: Logic
By Motoman on 5/28/2013 12:15:48 PM , Rating: 3
You can get sued for losing shareholders' money by being derelict in your duties as an officer of a publicly-traded company.

Not using loopholes isn't a crime. Being wasteful with shareholders' money can bring a class-action suit though claiming damages through negligence, or something similar.

RE: Logic
By BRB29 on 5/28/2013 12:44:37 PM , Rating: 2
The executives cannot be sued for derelict of duties either unless they are breaking something on their contract. They still can't go to prison unless they're breaking the law. Breaking the contract will only cost them money.

If executives are blowing the company's money on personal BS and claiming it as work expense, then you can sue them because that's illegal. Not evading taxes is perfectly legal. There's no way you can prove that not evading taxes is costing the company massive profit unless you are in the company. The logistics and cost analysis on how much a new branch or entity in another country is massive.

RE: Logic
By Motoman on 5/28/2013 3:26:37 PM , Rating: 2
IANAL, but I think you're talking about a civil suit in such a case. Basically, you're entrusted by the shareholders to be a proper steward of their money. And if you do something patently stupid - like pay more taxes than you have to - you're not being a proper steward of the shareholders' money.

It's happened more than once before, and will happen more than once in the future.

RE: Logic
By BRB29 on 5/29/2013 9:29:02 AM , Rating: 2
I know you're not a lawyer but neither am I. But I do know my rights as a stockholder, different types of stocks, corporate responsibilities, etc... because I put my money on the line in their company.

CEO gets paid a small or 0 salary and a big incentive package. That's their motivation to make the business successful because the value of that package is based on their performance.

The CEO is just like any other employee because he/she is also an employee. They are only prosecuted by the law if they break the law. So a bad performance evaluation is not grounds for prison.

They are not a steward of your money. You pay money to own a share of the company. That share's value is what people are willing to pay and you are willing to sell. No one is holding your money. They are only responsible for making sure that your share is real and accounted for. You also get certain rights depending on what you purchased. Even if you buy the company's bonds, they are only liable to pay you back.

RE: Logic
By Motoman on 5/29/2013 11:43:24 AM , Rating: 2
That's simply not true.

Google "ceo sued by shareholders" or something similar. You'll find endless numbers of cases where such a thing happens without anything *criminal* having happened. Simply the BOD/executives making decisions that the shareholders found to be harmful.

RE: Logic
By BRB29 on 5/29/2013 12:42:32 PM , Rating: 2
anyone can sue anyone else or business and even the government for any reason. It doesn't mean anything. You can bring that case to court and waste your time/money but you won't get anywhere.

Yea, I googled it and it says exactly what I said. The only lawsuits that had any actions against the CEOs are the ones that showed they did something ILLEGAL like the HP case.
All the other ones show that they just get tossed aside because neither the court or the corporation cares(eg. Apple cash lawsuit). You can waste money to create a lawsuit that would probably be thrown out after the judge looks at it.

I'm no lawyer, but I do accounting. I've spent years learning this and still in school to get my MBA. I have to study business laws as part of both my degrees.

Almost every CEO out there is under performing right now. They should all be served papers.

RE: Logic
By SublimeSimplicity on 5/28/2013 12:47:34 PM , Rating: 2
What if one of the investors IS the government. Could they be charged with defrauding the government, for not avoiding paying taxes to the same government?

RE: Logic
By Motoman on 5/28/2013 5:10:34 PM , Rating: 2 theory, yes. If the government is a shareholder, then the government's interest in the company is the same as any other shareholder - so, maximize revenue and minimize expense.

It might seem odd to think of it that way, but yes...the government may not initiate such a lawsuit, but I can't imagine it wouldn't participate in a class action if it was brought.

RE: Logic
By BRB29 on 5/29/2013 10:40:42 AM , Rating: 2
An investor can be anyone/anything with a Tax ID. It's not fraud if it's legal. You can call it shady but that's as far as you go. If you don't dodge tax, it's still legal.

I don't understand the whole argument. Any executes cannot be sued for underperforming regardless of who owns the stock. Stockholders can sue the company but it probably won't get them anywhere but waste more money. The company can sue the executives for not following their contract. That's all there is to it.

If you don't like a company's way of doing business then I wonder why you bought the stock. If you did not know when you bought it then you did not do enough research. Even then, you can still sell it and watch their stock price tank as they are not competitive in the industry. I don't think any executives would ever want to make their company uncompetitive as it means their payout will be significantly smaller.

“So far we have not seen a single Android device that does not infringe on our patents." -- Microsoft General Counsel Brad Smith

Most Popular Articles5 Cases for iPhone 7 and 7 iPhone Plus
September 18, 2016, 10:08 AM
Automaker Porsche may expand range of Panamera Coupe design.
September 18, 2016, 11:00 AM
Walmart may get "Robot Shopping Carts?"
September 17, 2016, 6:01 AM
No More Turtlenecks - Try Snakables
September 19, 2016, 7:44 AM
ADHD Diagnosis and Treatment in Children: Problem or Paranoia?
September 19, 2016, 5:30 AM

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki