Some in the UK may scoff at hearing that Google, currently worth about $289 billion, is paying only $10 million in UK corporate taxes between 2006 and 2011. But not Google Executive Chairman Eric Schmidt.
In fact, Schmidt is confused about why the UK's political pundits and politicians are upset about the Internet search giant's tax policy. After all, Google is paying taxes, and if the UK wants more income, all they have to do is change their tax laws.
"What we are doing is legal," Schmidt said in an interview on BBC's Radio 4. "I'm rather perplexed by this debate, which has been going in the UK for some time, because I view taxes as not optional."
That echoes the sentiments shared by Apple's CEO, Tim Cook, during a recent testimony before a Congressional panel. That panel was investigating Apple's tax policies. During Cook's testimony, the Apple CEO said his company pays every tax that it legally owes - down to the dollar.
Google, like Apple, uses a complex tax scheme, often referred to as the "Double Irish with a Dutch Sandwich," to drastically lower what it pays on corporate income taxes both in the U.S. and the UK. The scheme requires companies to collect its revenues in Ireland, where they're taxed at 12.5 percent, before channeling that money through the Netherlands and to offshore accounts.
That corporate tax policy has upset a good deal of politicians, UK and U.S. alike, who claim the multi-billion-dollar companies are gutting government revenues during a time of tightened budgets.
The European Union also takes an exception to Google and Apple tax policies. Algirdas Semeta, the European Commission's commissioner for taxation, said Google's practices are "scandalous" and "an attack on the fundamental principle of fairness," at a press conference in Brussels in late 2012, according to Bloomberg.
Ireland repeatedly insists the country isn't a tax haven for major corporations, rebuffing any arguments presented by foreign governments.
For their part, both Schmidt and Cook said their companies aren't unwilling to pay more in taxes, provided that politicians change and streamline tax laws.
"If the British system changes the tax laws, then we will comply," Schmidt said. "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."
