Dec
24
2011

Google has avoid 4.6 billion tax in five years

Article by Kate

The latest issue of Britain’s Sunday times newspaper quoted the SEC to provide the data, says the United States is the Internet search engine giant Google (Google) using complex accounting method in the past five years, tax at least 32 million pounds (.3 billion).

The investigation has uncovered Google company network, across including Ireland, the Netherlands, Bermuda, and at least five jurisdictions its overseas revenue in its subsidiary legally free transfer, and finally reach the purpose of avoiding pay huge tax.

The SEC has asked Google provide may explain its tax accounts in more detail. The agency’s document shows that Google last year’s global revenue up to 178 billion pounds (about 293 million dollars), including 52 percent from outside the United States market. But last year, Google overseas tax rate only 3%.

In Britain, for example, Google in the UK average annual advertising revenues can be as high as 20 million pounds. British corporate tax rate to 28%, however the Sunday times each year, the survey revealed only Google in Britain about 300 million pounds tax.

The survey found, Google’s tax avoidance means very complex: first will its search and advertising technology copyright registered in Dublin, Ireland, a shell of a holding company makes this part income become overseas income, evaded the American 35% of heavy tax rates. The Irish holdings inc. and a subsidiary, responsible for dealing with Britain and other market of the advertising business. Even in Britain, to Google fell to customers with ads, Irish company contact, rather than with British companies, so Google and evaded British 28% rate.

While Ireland rate only 12.5%, far below the beauty, UK, but Google is too high. In order to overseas revenue transferred to Bermuda, Google using tax haven is a tax lawyer called “double Irish” and “the Dutch sandwich” circuitous route. Ireland’s laws make it hard to Google profits without the payment of large amount of taxes directly to the Bermuda, but because Ireland to tax policy in some other eu right tax payment countries, so Google first to shift profits have multiple preferential tax Dutch. Google in the Netherlands set up subsidiaries is just a nominally company, it will Google’s revenue then transferred to Bermuda. Because the Bermuda subsidiary in the management of the actual or be Irish company management, therefore this path has been dubbed the “double Irish” nickname.

This isn’t Google first into a “tax avoidance door”. The Sunday times two years ago, Google disclosed in 2008 in the UK’s advertising revenue up to 16 billion pounds, but only 14 million pounds, less taxes into 450 million pounds. Google subsidiary in China many times before there be exposed to the tax evasion behavior. In April this year, Google subsidiary in China or business close partner – goo goo fruit information technology (Shanghai) Co., LTD, Shanghai constitutive Google search advertising company and information technology (China) Co., LTD is refers to the tax violations there, million yuan; the amount Specific illegal activities include the use of false invoices not according to stipulations, withholding tax problems.

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