Click to Skip Ad
Closing in...

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

Published Dec 13th, 2012 10:22PM EST
Schmidt Defends Google

If you buy through a BGR link, we may earn an affiliate commission, helping support our expert product labs.

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.

Brad Reed
Brad Reed Staff Writer

Brad Reed has written about technology for over eight years at and Network World. Prior to that, he wrote freelance stories for political publications such as AlterNet and the American Prospect. He has a Master's Degree in Business and Economics Journalism from Boston University.