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Is Google hiding $10 billion in revenue in Bermuda tax-shelter?

Written by Andre Yoskowitz (Google+) @ 10 Dec 2012 22:35 User comments (16)

Is Google hiding $10 billion in revenue in Bermuda tax-shelter? According to their recent filings, Google was able to avoid almost $2 billion in worldwide income taxes in 2011 by moving $10 billion in revenue to a shell company incorporated in Bermuda.
Bermuda does not have a corporate income tax, and the $10 billion was about 80 percent of Google's total pretax profit during the year.

The news is likely not good for Google, who is facing increased scrutiny in France, the UK, Italy and Australia over legal tax dodging. The EU, specifically, is asking member states to create anti-abuse rules for tax avoidance including creating a blacklist of tax havens, such as Bermuda and the Caymans.

For its part, Google stresses everything they do is completely legal (which it is) and that they boost the economies of the nations in which they employ workers: "For example, we also employ over 2,000 people, help hundreds of thousands of businesses to grow online, and invest millions supporting new tech businesses in East London." In the UK, Google paid $10 million in taxes on $4.1 billion in revenue.

In 2011, Google reported a tax rate of 3.2 percent on its overseas profits, even though most of its foreign sales in those nations should have had tax rates around 28 percent. Google is certainly not the only company to use such tactics, as Apple, Microsoft, Amazon, Starbucks and other giants employ the same maneuvering.

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16 user comments

111.12.2012 0:10

Good for them. They won't gain anything by being the only major company to stupidly donate $2 billion dollars to world governments when presented with the option to legally avoid them. Hell, I'd do it too if I could.

211.12.2012 1:14

When I have legal ways to avoid spending money, I usually take advantage of them too! And all this time I thought I was the only one!


311.12.2012 1:16

Originally posted by Notcow:
Good for them. They won't gain anything by being the only major company to stupidly donate $2 billion dollars to world governments when presented with the option to legally avoid them. Hell, I'd do it too if I could.
agreed, I don't know where people get off saying "you didn't pay all of the taxes!" We don't need all of these taxes, we need a lean government. It's not the place of the damn government to steal from me... Ayn Rand all the way!

Custom Computer rebuild 2.80GHZ@6cores/8GBRAM|3DS | WII|360|PS3|

411.12.2012 9:21

Keep it up Google, Apple, Amazon, etc. :) I am honestly impressed by their actions. Nothing sweeter than edited by ddp over governments.

This message has been edited since its posting. Latest edit was made on 12 Dec 2012 @ 15:26

511.12.2012 17:51

This article needs more about how Starbucks haven't paid their taxes either.



612.12.2012 2:47

starbucks isnt tech related and what what i hear there coffee is a joke anyway,ive often been told worse in the world.

back on topic

apparently there are tax holes in every country but its usually politicians that seem to find the loop holes and take advantage of them.good work google.


custom built gaming pc from early 2010,ps2 with 15 games all original,ps3 500gbs with 5 games all original,yamaha amp and 5.1channel surround sound speakers,46inch sony lcd smart tv.

712.12.2012 7:37

Quote:
starbucks isnt tech related and what what i hear there coffee is a joke anyway,ive often been told worse in the world.
You don't say.

My original point being, who cares?


813.12.2012 19:22

I'm just jealous I can't afford to keep a team of tax attorneys and politicians working for me, damn!
It would be more interesting to see the real cost of avoiding the taxes, plus the actual taxes as a percentage.

913.12.2012 19:34

Originally posted by Ripper:
Quote:
starbucks isnt tech related and what what i hear there coffee is a joke anyway,ive often been told worse in the world.
You don't say.

My original point being, who cares?
>Website is tech related.
>Article is about tech related companies dodging taxes.

If they were to list every company guilty of tax dodging and include the non-tech related ones, this article would be unnecessarily large list.

1013.12.2012 20:05

That's cute but, no, you still missed my point. I shall clarify because reading is hard.

I was originally being facetious, sorry that it was lost on you. My point was not who cares that Starbucks is not a tech related company despite this article being written on a tech site (lol, should I be insulted?), rather who cares that any of them evaded their taxes at all. It's not just but it is what it is.

What if your local PC repair bloke took some cash jobs on the side? Would you be sending him up shit creek to the IRS/HMRC (or whoever you have in your respective country) without a paddle, or would you not be bothered at all? Probably the latter.

Quote:
The EU, specifically, is asking member states to create anti-abuse rules for tax avoidance including creating a blacklist of tax havens, such as Bermuda and the Caymans.
The issue lies in the quote above and that should be people's focus - not witch-hunting companies who have exploited what is only good business sense. I'm merely being pragmatic about it; you solve the issue at the root of it and it begins to get better. If not, shall we just get angry every year when Google posts a suspiciously low tax filing but not actually do anything about it?


1114.12.2012 8:54

Sometimes I just have to shake my head in disbelief when reading some of these posts.

These large corps are tax-dodging, plain and simple. While it is still legal, for now... it's still a shit move and ultimately hurts the little guy. Yeah... that's you and I.

It's amazing how you guys will support large corps not paying taxes (think funding for education, medical assistance, etc...) yet you'll turn right around and publicly voice how the entertainment industry is nothing but a bunch of money-grabbing scumbags when it comes to articles about them trying to recoup funds stolen through piracy.

What a bunch of hypocrites.

1214.12.2012 10:27

If it's just fine, even a great patriotic thing to do for a presidential candidate, why wouldn't it be OK for Google???

1314.12.2012 11:19

The point is that it's not ok for ANYONE to be doing it. How is that hard to understand?

1414.12.2012 19:23

The practice is unfair and unfortunate but what can you do? Google and a number of other companies have international revenue streams that can be diverted to tax havens. The real brick & mortar manufacturing companies - genuine job creators - with only US operations are the ones who actually bear the brunt and burden. What I can't figure out is how Romney whose activity is strictly that of corporate raiding within US manage to have income hived off to the Caymans? Oh ! I get it. Bain Capitol is registered in Caymans! AND he gets tax write off for his car elevator in the US.

1515.12.2012 1:53

Originally posted by bhetrick:
It's amazing how you guys will support large corps not paying taxes (think funding for education, medical assistance, etc...) yet you'll turn right around and publicly voice how the entertainment industry is nothing but a bunch of money-grabbing scumbags when it comes to articles about them trying to recoup funds stolen through piracy.

What a bunch of hypocrites.
Actually there's a pretty clear distinction there. Google uses laws to shaft the government, the entertainment industry uses laws to shaft individuals. Now do you see why many individuals here view the two differently?

1615.12.2012 3:52

Originally posted by bhetrick:
Sometimes I just have to shake my head in disbelief when reading some of these posts.

These large corps are tax-dodging, plain and simple. While it is still legal, for now... it's still a shit move and ultimately hurts the little guy. Yeah... that's you and I.

It's amazing how you guys will support large corps not paying taxes (think funding for education, medical assistance, etc...) yet you'll turn right around and publicly voice how the entertainment industry is nothing but a bunch of money-grabbing scumbags when it comes to articles about them trying to recoup funds stolen through piracy.

What a bunch of hypocrites.
What? Who is in support of large crops not paying taxes? That's not even within the domain of this site. Any rational person is for a moderate crop tax. Furthermore, I don't expect large companies to voluntarily donate money to the government when they're not technically required to. Seems like you're having trouble understanding. It seems that you interpreted the article as having an anti-corporate spin put on it, when I think Andre intended it to be pretty neutral.

To ask companies to pay taxes that they're not required to pay is akin to asking them to sacrifice a large portion of their revenue.
This message has been edited since its posting. Latest edit was made on 15 Dec 2012 @ 3:54

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