It has been revealed that Google has been sheltering nearly $10bn of its revenues in Bermuda, which has allowed it to avoid some $2bn in worldwide income taxes since 2011. Google payed just £6m in corporation tax in the UK after having generated approximate £2.5bn in UK sales last year. In an interview in New York, Eric Schmidt unabashedly revealed that Google has no intention of paying more to the UK.
Schmidt believes that such schemes as sheltering revenues in tax havens are legitimate and that the company does pay its taxes “in the legally prescribed ways”.
“I am very proud of the structure that we set up. We did it based on the incentives that the governments offered us to operate,” he said. “It’s called capitalism. We are proudly capitalistic. I’m not confused about this.”
In the UK, the Chancellor has stated that he's committed to “leading the international effort” to prevent international companies transferring profits away from major economies, including Britain, to tax havens."
“We will put more resources into ensuring multi-national companies pay their proper share of taxes,” he said. “With Germany and now France, we have asked the OECD to take this work forward and we will make it an important priority of our G8 Presidency next year.”
There's a lot of tension between multi-national companies and the countries in which those companies operate. Those individual countries seem to feel that they're entitled to a larger share of corporate tax, while the companies don't necessarily recognize any individual country as having a right to a large chunk of paid corporate tax.
What do you all think? Does Google seem to have a fair point? After all, the system does legally allow for this sort of behavior...so who's to blame/should we even blame?
(this article has some pretty clear bias: Belfast Telegraph)
You can read specifically about Google funneling money into Bermuda here: Bloomberg