Google chairman says it is up to MPs to reform tax

GOOGLE’S Eric Schmidt has said he is perplexed by the controversy surrounding his firm’s tax arrangements, claiming it is up to politicians to decide how much companies pay, not the companies themselves.

The billionaire chairman, who has spent much of the last week responding to public anger over Google’s tax affairs in the UK, yesterday said companies should pay the taxes they are legally required to, and have an obligation to shareholders not to pay any more.

He said tax rates were a political issue and that if legislators wanted firms like Google to pay more, they should respond by changing the law rather than criticising tax avoidance.

“What we are doing is legal. I’m rather perplexed by this debate, which has been going in the UK for some time, because I view taxes as not optional,” Schmidt told the BBC.

“I view that you should pay the taxes that are legally required. It’s not a debate. You pay the taxes.”

Schmidt’s comments are the latest challenge to politicians who have criticised Google for its complex arrangements, which saw it legally pay just £6m in corporation tax in 2011, the last set of publicly-available accounts.

Speaking last week, he said the international tax system is “irrational” and needs reform, claiming that a computer engineer would not have designed such a system of laws.

“If the British system changes the tax laws, then we will comply,” Schmidt said yesterday. “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.”

Schmidt has emphasised Google’s commitment to the UK, where the firm employs hundreds of staff, whatever tax changes may happen.

However, the firm has been publicly criticised by MPs, twice being hauled in front of the Public Accounts Committee and being chastised by Labour leader Ed Miliband at Google’s own Big Tent event last week.

Schmidt’s claims have been somewhat echoed by Apple boss Tim Cook, who told US senators last week that the company would support a simplified tax system even if it meant Apple paying more.

International leaders including David Cameron have appeared to respond to the heightened debate around tax payments by making the first steps towards setting up a new international tax agreement that would see more information exchanged between authorities.