GOOGLE CUT its taxes by $3.1 billion (€2.2 billion) in the last three years by using a strategy known as the “Double Irish”, under which it shuttled foreign profits through its Irish operation to Bermuda.
Google’s “income shifting” helped reduce its overseas tax rate to 2.4 per cent, the lowest of the top five US technology companies, according to regulatory filings in six countries.
Google’s tax reduction method takes advantage of Irish tax law to legally move profits in and out of subsidiaries here, eventually lodging them in island havens that levy no corporate income taxes.
Companies that use the “Double Irish” arrangement – so named because it relies on two Irish companies – avoid taxes at home and abroad.
Facebook is preparing a similar structure that will send earnings from Ireland to the Cayman Islands, according to its filings in the Caymans and Ireland.
The strategy yesterday attracted criticism in the US, which is struggling to close a projected $1.4 trillion budget gap. The US has a corporate tax rate of 35 per cent.
The tactics of Google, which employs almost 2,000 people in Dublin, and Facebook depend on “transfer pricing” – paper transactions among a company’s subsidiaries that allow for the allocation of income to tax havens while attributing expenses to higher-tax countries.
International income shifting helped cut Google’s overall effective tax rate to 22.2 per cent last year. The company also shifted income through the Netherlands, in a technique known as the “Dutch Sandwich” because it sees the country acting as a stopover between two other jurisdictions.
“It’s remarkable that Google’s effective rate is that low,” said Martin Sullivan, a tax economist who formerly worked for the US treasury department.
A spokesman for the Department of Finance declined to comment specifically on Google’s strategies.
“Ireland always seeks to ensure that the profits charged in Ireland fully reflect the functions, assets and risks located here by multinational groups,” he said.
A Google spokeswoman said that the firm’s practices were “very similar to those at countless other global companies” operating across a wide range of industries.
Google’s Irish business provides technical, sales and operations support to customers in more than 50 countries. Last year, the Dublin-based company posted profits of €47.5 million, up almost fivefold on the previous 12 months.
Google paid taxes of € 18.3 million in Ireland last year, up from €8.1 million in 2008.
by SpiritLeo 6 years ago
Probably most of you have noticed that Google has made some search changes.Some time ago I came across an interesting article on webpronews.com and I would love to share it with you and find out your opinion about this change.I would like to quote:[...Last week, the search giant said that it would...
by SEO Ibiza 7 years ago
seen this?http://searchnewscentral.com/2011071417 … pages.html
by rhamson 3 years ago
"All we know (based on leaks) is (1) it establishes an independent tribunal that can force nations to pay global corporations any lost profits due to that nation’s health, safety, environmental, labor, or securities regulations, (2) extends patent protections for U.S. pharmaceutical...
by paradigm search 3 years ago
"The Google-Twitter Deal Goes Live, Giving Tweets Prominent Placement In Google’s Results"Well now... Looks like Twitter may have become less useless. http://searchengineland.com/google-twit … ive-221148I don't know anything about this. What say you?
by Brian 7 years ago
This may not be news to a whole lot of people, but, I am getting sick of this. Why isn't the Government doing anything about it, especially when they know that it is killing our economy? Not, to mention that we are fighting wars over it, only to have the countries we are "Aiding" are...
by ScarletRyan1970 8 years ago
Copyright © 2018 HubPages Inc. and respective owners. Other product and company names shown may be trademarks of their respective owners. HubPages® is a registered Service Mark of HubPages, Inc. HubPages and Hubbers (authors) may earn revenue on this page based on affiliate relationships and advertisements with partners including Amazon, Google, and others.
|HubPages Device ID||This is used to identify particular browsers or devices when the access the service, and is used for security reasons.|
|Login||This is necessary to sign in to the HubPages Service.|
|HubPages Traffic Pixel||This is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.|
|Remarketing Pixels||We may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.|
|Conversion Tracking Pixels||We may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.|