Google boss tells UK politicians to get tax rules in order

Julian Harris
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GOOGLE’s Eric Schmidt has become the latest business chief to hit back in the row over corporation tax, slamming the “irrational structure” of the international tax system.

But the tech giant’s chairman was careful to stress his firm’s commitment to the UK, irrespective of a potential clampdown on the methods businesses use to minimise tax.

Speaking yesterday at the company’s Big Tent – an annual event that attracts high level speakers – Schmidt responded to charges levelled at him by Labour leader Ed Miliband that Google “goes to extraordinary lengths to avoid paying its taxes”.

“I can’t defend the international tax regime,” Schmidt said. “I can’t defend an irrational structure – a computer engineer would not have designed this. All of us are operating in a very, very longstanding tax regime which was set up for various reasons that don’t necessarily make sense to me or anyone else.”

Yet the web giant boss insisted that Google is committed to doing business in the UK, even if politicians try to change the rules to extract more tax revenues from the firm.

“We love the UK, it’s a huge operation for us. Google will continue to invest in the UK no matter what you guys do – we love you guys too much, we will continue investing in the UK no matter what,” he enthused. Google is building its huge new headquarters at a site in Kings Cross.

Speaking at the Big Tent prior to Schmidt’s appearance, Miliband pledged that, if Labour gain power, he will take unilateral action to ensure that firms such as Google pay more tax. “I welcome Google’s call for international tax reform,” he said. “[But] if we cannot get international agreement, a Labour government will act here at home.”

Prime Minister David Cameron yesterday attended a European Council meeting on tax evasion and avoidance. “We have agreed to push for a new international standard on automatic information exchange between tax authorities,” he said afterwards. “Let us be clear – the best solution is to establish tough global rules and standards where all multinationals make a full and fair contribution.”

Schmidt’s comments yesterday followed similar sentiments from Tim Cook, head of Google’s rival Apple. “The tax code has not kept up with the digital age,” Cook told the US Senate on Tuesday. “Apple has always believed in the simple. It is in this spirit that we recommend a dramatic simplification of the corporate tax code.” Schmidt has called for a system that “doesn’t change very much”.