Google’s Eric Schmidt defends “evil” company set up
"You are a company that says you do no evil. I think that you do do evil in that you use smoke and mirrors to avoid paying tax." These were the comments from Public Accounts Committee chairperson Margaret Hodges at a hearing on Wednesday, where she accused Google of "deliberately manipulating the reality of their business" to shelter profits from UK taxes. Now, Google executive chairman Eric Schmidt has spoken out about his company's financial affairs in an opinion piece for the Observer. He wrote: "At a time when families are having to tighten their belts and funding for vital public services is under pressure, corporate taxation is rightly a hot topic. “And as a company that has always aspired to do the right thing, we understand why Google is at the centre of that debate." He went on to state that Google’s accounts were complied with international taxation treaties that allowed it to pay most of its tax in the United States. Schmidt maintained that corporation tax should be paid on a company's profits rather than its revenues, explaining that as Google is a multinational corporation whose engineers were predominantly based in the US, the company’s taxes should be channelled there. He says this is all in the rules laid out by politicians. He ended by writing that as Google generates large revenues, it is able to plough money back into the UK economy. "For example, Google has just announced plans to invest more than £1bn in new offices in London's King's Cross. It's been estimated that this investment will generate some £80m a year in new employment taxes and £50m in stamp duty. This is in addition to the significant amounts we already pay in UK tax through corporate, local and employment taxes," he wrote. Schmidt is set to meet David Cameron tomorrow, Monday 20,for the quarterly meeting of the prime minister's Business Advisory Group.