Google’s Bermuda Tax Dodge

How Google Became the Michael Jordan of Sheltering Income

What do many of America’s tech giants have in common? They’re really good at exploiting international tax laws and loopholes to enhance overall profitability.

We’ve talked about the shenanigans of Microsoft and HP here:

Forget Fairness, Let’s Talk About Stupidity (TRB)

But let’s not leave out Google, who has become the Michael Jordan of sheltering income from the collectors, around the world…

From Bloomberg:

Google Inc. (GOOG) avoided about $2 billion in worldwide income taxes in 2011 by shifting $9.8 billion in revenues into a Bermuda shell company, almost double the total from three years before, filings show.

By legally funneling profits from overseas subsidiaries into Bermuda, which doesn’t have a corporate income tax, Google cut its overall tax rate almost in half. The amount moved to Bermuda is equivalent to about 80 percent of Google’s total pretax profit in 2011.

Google paid a tax rate of 2.3% on overseas business last year, according to the story, even though most of that revenue was done in European countries with corporate tax rates of around 30%.

Gangsta.

Source:

Joshua Kranz is a lawyer and writer.  He lives in Brooklyn.  Sometimes he blogs: http://generalrodetsky.blogspot.com/. ...read more

Comments

  • Zagen Germaine

    If you had the choice
    between taking out $40,000.00 of your inherited cash which is part of a larger
    IRA to pay off debts (but did not have to sell stocks to get that $ & your
    tax bracket is $15% but perhaps less since I am on SSD & earn less than
    14,000.00 a year) or take out a 9% re-fill on a 2nd home, which is being rented
    for $1000.00 a month that will be sold in 3 years with a contract)- is it as
    simple as comparing interest rates to decide that a 9% re-fill is a better deal
    than a 15% deal? ( the 9% is non-negotiable as I can only get a “no doc/no
    asset loan” at that tax brackets unfortunately)or are there other matters to
    consider.

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