Schmidt defends Google’s tax avoidance strategy, says sheltering profits is perfectly legal

[Corey]

Google (GOOG) chairman Eric Schmidt has a decent rejoinder to politicians upset that his company is sheltering profits in Bermuda shell companies: Under the rules governments have written, such behavior is perfectly legal. Per the Sydney Morning Herald, Schmidt this week said that he was “very proud of the structure that we set up” to keep his company’s taxes as low as possible while adding that “we did it based on the incentives that the governments offered us to operate.” But while Google’s behavior may be legal, there are still important questions about whether governments should put up with it.

Vince Cable, the business secretary of the United Kingdom, said that “it’s certainly not the job of government to accommodate” Google’s tax avoidance and vowed that “on behalf of taxpayers, we’ve got to retrieve the situation.” Both Google and Amazon (AMZN) have come under fire in the U.K. recently for paying a relative pittance in taxes despite racking up annual sales worth billions of dollars.

 

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