Google's Eric Schmidt: UK Should Change Tax System, Google Not to Blame
May 28, 2013 10:05 AM
comment(s) - last by
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.
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5/29/2013 9:29:02 AM
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.
5/29/2013 11:43:24 AM
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.
5/29/2013 12:42:32 PM
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.
"If they're going to pirate somebody, we want it to be us rather than somebody else." -- Microsoft Business Group President Jeff Raikes
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