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  (Source: stateofsearch.com)
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



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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
Well...in 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.


"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer














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