Google boss calls for a 'rational and predictable international tax system'
Source: The Guardian
The Google chairman, Eric Schmidt, has told political leaders to sort out a rational and predictable international tax system, as he faced a wave of criticism over the firm's failure to pay more tax.
Ed Miliband attempted to deliver his rebuke direct to Schmidt when invited to speak at the Google Big Tent conference, although the US executive missed the Labour leader's address on Wednesday, saying he had to attend a meeting in London.
Nick Clegg disclosed at a press conference he had also criticised Google at a Downing Street meeting earlier in the week at which Schmidt was present. David Cameron's aides, after earlier denying the prime minister rounded on Schmidt at that meeting, later briefed that Google had been implicitly rebuked in the context of the prime minister's general call for greater tax transparency as part of his agenda for the G8 summit next month.
Speaking at the annual Big Tent event after Miliband had left, Schmidt said one of his key concerns about changes to the tax structure was that Google might be "doubly or quadruply taxed".
Read more: http://www.guardian.co.uk/technology/2013/may/22/google-boss-international-tax-system-eric-schmidt
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Google uses the tax laws in Ireland and the Netherlands, termed a "Double Irish" and "Dutch Sandwich" by tax attorneys, to push cash into accounts located in Bermuda, a country without corporate income tax, in order to avoid around $2 billion in income tax each year. Yahoo uses a Netherlands-based accountant and stores funds in Mauritius and Switzerland, as well as operating an Irish subsidiary that is claimed to be a tax resident of the Cayman Islands. Cisco is alleged to have shifted half of its global profits to a unit in Switzerland, also avoiding billions in taxes.
In order to combat the "stateless income" that large companies have used to avoid taxes, a number of organizations are stepping in to work on the problem. Organization for Economic Cooperation and Development, at the request of a number of countries, is working on an "action plan" to prevent the loss of tax revenues via profit shifting, with a view to publishing it in July. The US Treasury Department listed a number of global tax loopholes that need to be closed, some of which have failed to close despite legal efforts.
http://www.bloomberg.com/news/2013-05-22/google-joins-apple-avoiding-taxes-with-stateless-income.html
