Google chairman Eric Schmidt has fired back against claims that the search giant is dodging taxes.
Speaking this week about the company’s low tax rate payments in the UK Schmidt proclaimed:
“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.”
The issue of tax rate payments for tech companies came to the forefront of discussion after Apple CEO Tim Cook took a similar stance during a US Senate hearing. At the time Tim Cook noted that Apple participated in fully legal tax payments that were within the guidelines of current US tax codes.
Tim Cook and Eric Schmidt both agree that companies must do everything they can to keep tax bills lower. Noting that their first responsibility is to shareholders who demand the highest profits possible.
Tax laws have come under fire specifically at tech companies because they can easily move around products and sales to offshore countries. The company’s that deal mostly in software do not have large tangible goods that must be moved. In other cases the companies simply setup offshore subsidiaries that funnel profits into low tax collecting countries.
Some analysts have blamed Apple’s legal tax dodging for a shift in consumer perception of the company since news of its extremely low tax rates broke in the middle of a recession.
U.S. and UK officials have brought members of the tech community in front of tax panels for questioning but at this time they have done very little to close tax loopholes that allow taxes to be evaded in the amount of billions of dollars.
Do you think US and UK tech company’s should pay a higher or perhaps flat tax rate?