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.
This article is over a month old, voting and posting comments is disabled
5/29/2013 4:16:34 PM
Decent idea in theory, but how does the US make foreign companies pay tax for selling products here?
Even tracking all imports from every company (which is impossible) is easily circumvented. Samsung can set up a foreign subsidiary called Samsing, which buys phones from Samsung, puts a label on it, and sells them in the US at the same price. Samsing then shows zero profit to the US gov't, while Samsung claims all sales are in Korea.
In the end, currency alongside repatriation tax is the only solution. Wherever you do business, you're going to get currency in those dollars. That money can sit offshore, but it won't do anything useful until it become income for someone else and get taxed (and if it was declared as income for an employee/owner or other business expense in the first place, it'd be tax deductible anyway).
"If you can find a PS3 anywhere in North America that's been on shelves for more than five minutes, I'll give you 1,200 bucks for it." -- SCEA President Jack Tretton
Apple's Tim Cook to Talk Profit Shifting, Taxes at U.S. Senate Hearing
May 20, 2013, 1:44 PM
UK Upset About Google's Small Tax Payment, Google Says It Did Nothing Wrong
April 23, 2013, 2:06 PM
Google Avoids Paying $1.6 Billion USD In Taxes, UK PM Speaks Out
January 2, 2013, 11:32 AM
Apple Makes $9.5B USD in Britain, Pays Only 0.16% in Taxes; Google Also Targeted
April 10, 2012, 5:46 PM
"Mo' Money", Less Problems: Google Offers Cold Hard Cash for Finding Its Browser Bugs
October 1, 2014, 3:04 PM
eBay to Spin Off PayPal Business Next Year
September 30, 2014, 7:28 AM
Facebook to Use Your Browsing Data to Sell Offsite Display Ads
September 29, 2014, 3:52 PM
After Microsoft Complains, EU Rejects Google's Search Settlement for Second Time
September 23, 2014, 4:58 PM
Microsoft Expands Free Office 365 to All College Students
September 22, 2014, 3:21 PM
Apple Adds New Password Protection for Third Party iCloud Apps
September 17, 2014, 8:50 PM
Most Popular Articles
New AT&T Mobile Share Value "Double Data" Promotion Lasts Through October
September 28, 2014, 8:32 AM
TiVo Mega Features 24TB of Storage, Can Record Three Years* Worth of TV Content
September 8, 2014, 8:45 AM
Tesla Motors Confirms Nevada Gigafactory Deal, Will Receive $1.25B in Tax Breaks
September 4, 2014, 8:24 PM
FBI Outraged That Apple, Google are Adopting Digital "Locks" to Protect Users
September 26, 2014, 1:00 PM
Samsung Takes on All Challengers with 5.7” Galaxy Note 4, 5.6” Galaxy Note Edge
September 3, 2014, 10:00 AM
Latest Blog Posts
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information