Tuesday, December 11, 2012
Google Avoids $2 Billion in Tax?
As Starbucks make offers to the UK tax man which some suggest amount to mere ‘chump change’, the immoral tax avoidance practices of international companies continue to reach public awareness. We now discover that Google, whose European headquarters is in Ireland, managed to save some $2 billion in international income taxes in 2011. They did this by transferring some $9.8 in revenues to its shell company in Bermuda, which doesn't have a corporate income tax. As a result Google was able to save its overall tax bill by an impressive 50%.
Apple, Facebook and Google all use a technique which involves setting up two companies in Ireland, one usually registered in a tax haven and which acts as an intermediary between firms. This tax ‘game’ is perfectly legal and even allows them to avoid paying tax on its profits at even Ireland's low 12.5 % corporation tax on profits.
Perhaps its time we had a ‘name and shame’ list of those who profit, whilst their customers pay their dues, libraries close, their welfare is cut and the people put money into their pockets. The EU which is under financial pressure to find a solution to this Tax abuse and now claims that international companies tax avoidance was costing it over $1 trillion each year.
Original source Bloomberg: Google Revenues Sheltered in No-Tax Bermuda Soar to $10 Billion