Asked to defend the arrangement where most of Google’s taxes on money earnt in
Britain is funnelled through Ireland and Bermuda and the company pays an
effective rate of less than one per cent, he said, “Virtually all of the
American companies have tax structures like this. And there are analogous
strucures for European companies in America. But governments have a lot more
power than we do. We have to follow the law and if the law changes we will
absolutely follow it.”
Mr Schmidt said Google would continue to invest in the UK because of the
importance of the market, claiming at one point “We love the United Kingdom”.
Earlier in the day, Labour leader Ed Miliband had also used Google’s
conference to launch a stinging attack on global businesses including Apple
and Google, comparing their behaviour to that of Goldman Sachs and Lehman
Brothers.
Mr Miliband said that major businesses with low tax bills, including Google,
Apple, Amazon and Starbucks shared a culture of irresponsibility with the
banks that caused the global financial crisis. “I have deep problems about
the culture and the culture isn’t that different from what we saw at some of
the banks,” he said.
Mr Miliband called for more nimble regulation at a European level, reiterated
his call for a ‘Digital Ombudsman’ to regulate potentially anticompetitive
businesses, and added that capitalism “should be about more than adhering to
the letter of the law”. He said Google had diverged from its ambitious
slogan of “Don’t be evil”.
The Irish authorities themselves have called for an international clampdown on
companies shifting their profits around the world in a bid to diminish their
tax bills, responding to criticism that Apple in particular used loopholes
to transfer money. Google has also been condemned for claiming all its
European selling occurs in Ireland.
