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 11:45:38 AM
Thanks for once again pointing out that you've got not even the most tenuous grasp on reality.
There is 100% no doubt that what Google et al do re: taxes is 100% legal.
The loopholes *are* legal. Using them *is* legal.
The system needs to be fixed if you don't want corporations *legally* using every portion of tax law to their advantage.
5/30/2013 4:00:05 AM
The loopholes *are* legal. Using them *is* legal.
Again, you obviously have no experience whatsoever about tax havens and their utilisation in the UK tax system. I do. And it shows.
When you enter into any tax scheme you are making artificial claims about where you are based, where you are obtaining revenue, and the legality of your actions DEPENDS on you having been truthful.
It's not 'ILLEGAL' (as I told you several times) because people can't easily prove that you're not based in... wherever. But if you actually aren't, it IS illegal. You don't understand what the tax schemes involve at all.
Yet why would you, you're based in the US. And despite that you have the typical US ignorance to assume you know how the UK tax loopholes work.
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