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Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes
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WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 4219823 posted 2:32 pm on Oct 21, 2010 (gmt 0)

Bloomberg is reporting a tax dodge by Google that would make U2's Bono [slate.com] envious.

The hypocrisy of Google CEO's and their political advocacy is glaring, it's a case of only the little people should pay tax.

Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes

Google Inc. cut its taxes by $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda.


To reduce its overseas tax bill, Google uses a complicated legal structure that has saved it $3.1 billion since 2007 and boosted last year's overall earnings by 26 percent. While many multinationals use similar structures, Google has managed to lower its overseas tax rate more than its peers in the technology sector.


Irish law makes it difficult for Google to send the money directly to Bermuda without incurring a large tax hit, so the payment makes a brief detour through the Netherlands, since Ireland doesn't tax certain payments to companies in other European Union states. Once the money is in the Netherlands, Google can take advantage of generous Dutch tax laws. Its subsidiary there, Google Netherlands Holdings, is just a shell (it has no employees) and passes on about 99.8 percent of what it collects to Bermuda. (The subsidiary managed in Bermuda is technically an Irish company, hence the "Double Irish" nickname.)


The U.S. corporate income-tax rate is 35 percent. In the U.K., Google’s second-biggest market by revenue, it’s 28 percent.


Source: [bloomberg.com...]

 

walkman



 
Msg#: 4219823 posted 3:28 pm on Oct 21, 2010 (gmt 0)

Wow! If it's legal they have a duty to 'cheat' but it shows that this needs to be fixed. Other small companies pay 28% or whatever it is, Google and other large ones barely 3%.

Close all the loopholes and lower the rate for everyone.

Now they are lobbying Obama to bring that money back home without paying taxes.

Whitey

WebmasterWorld Senior Member whitey us a WebmasterWorld Top Contributor of All Time 5+ Year Member



 
Msg#: 4219823 posted 10:25 pm on Oct 21, 2010 (gmt 0)

The game goes on , and it sends a signal to all of those involved in e-commerce to do the same and international business to do the same. Business' need to have competitive corporate structure in place to be more " tax efficient "

But accountant and lawyers know that , and they earn lot's of fees from creating and administering these schemes. I don't see multi national e-commerce becoming easy to regulate for many decades to come.

The interesting day will come soon when all e-commerce platforms can buy " out of the box " corporate solutions. Governments are going to have to work hard to come up with counteractive strategies.

.... and the game goes on.

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