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Google's Schmidt calls for 'reasonable' debate on tax issue

Google's Eric Schmidt has defended his company's stance on how much tax it pays, saying he "can't fix" the law as it stands.

Google's Eric Schmidt has called for a "reasonable" debate about his company's tax practices, saying the problem lies with the international tax regime, rather than Google's methods.

Speaking at the Hay Festival, the big G's executive chairman said he "understood the complaint, but we can't fix it," Sky News reports. He was also keen to big up the fact that most of Google's services are free.

This week, Labour leader Ed Miliband blasted Google's tax situation as "wrong". He said he disagreed with Schmidt's assertion that his company's approach to tax was "just capitalism".

Schmidt repeated that Google's setup isn't illegal, and that plenty of other companies operate in the same way. "We organise ourselves to basically maximise revenue, maximise cash, maximise the things we do so we can invest in services which to you are largely free.

"I don't think the British company (Google UK) should be in charge of this question, I think the government should be in charge of this question, and the company will do whatever it says."

Schmidt repeated his earlier claim that he wouldn't have designed the international tax regime to work the way it does. "I would be very happy to have a more rational structure," he said.

Asked if Google was outmanoeuvring the government, Schmidt pointed out that "Governments have a lot more power than we do. We have to follow the law. If the law changes, we will absolutely follow it.

"There's no particular reason you shouldn't have a reasonable debate about this and we'll do whatever you decide."

Amazon has also come under fire recently over its tax practices, prompting debate whether the law needs changing. Amazon and Google may not be acting illegally, but what they're doing is immoral, critics say. What was that Google slogan about not being evil…?

Is Schmidt correct in criticising the international tax regime, or is he side-stepping the issue of corporate responsibility? He may not be able to fix the tax regime, as he says, but surely Google could pay more in taxes if it wanted to? What do you reckon? Let me know in the comments, or on Facebook.