Google’s former head, Eric Schmidt, was interviewed on camera by the BBC on Monday claiming that the firm is being ethical when it practices foreign tax avoidance in order to reduce the amount of tax it pays abroad. The former chief even went as far as to say that he would defend the way the company operates "for a very long time".
When pressed by BBC Newsnight’s Emily Maitlis on Google’s tax avoidance schemes, Schmidt responded quizzically, saying that:
“Would you like us to give more, voluntarily to these governments? Is that your request? … We feel very comfortable with what we’ve done, and I will defend the company, and the way it works, for a very long time.”
Maitlis cited news from January this year which revealed that the search engine had shifted $22.7 billion through a Dutch shell company to Bermuda in 2017 in order to reduce its tax bill; this was brought to light thanks to documents filed at the Dutch chamber of commerce. While Google and other big technology firms have been known to avoid tax, Google, in 2017, has put €4 billion more into the scheme than in 2016.
In a statement from January, Google said:
“We pay all of the taxes due and comply with the tax laws in every country we operate in around the world. Google, like other multinational companies, pays the vast majority of its corporate income tax in its home country, and we have paid a global effective tax rate of 26% over the last 10 years.”
Given Schmidt’s remarks during the BBC interview, it looks as though governments around the world will have to come to some sort of arrangement where it makes it impossible for wealthy firms, such as Google, to avoid paying tax.