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reported on Thursday that Google cut its taxes by $3.1bn in the last three years using
a technique that moves most of its foreign profits through
Ireland and the Netherlands to Bermuda. It has paid no taxes
in the UK since 2007 even though it is one of its biggest overseas markets.
Bloomberg said Google’s income shifting -- involving strategies known to
lawyers as the “Double Irish” and the “Dutch Sandwich” --
helped reduce its overseas tax rate to 2.4%, the
lowest of the top five US technology companies by market
capitalization, according to
regulatory filings in six countries.
Revenues from the United Kingdom totaled $840m in the third quarter - - representing 12% of
revenues -- but the US firm paid no corporate taxes in the UK even
though it has 850 employed there.
Income from selling advertising on Google's UK website goes straight to its
The London Independent says the latest filing by Google UK at Companies House in London shows that
"administrative expenses" rose by £21.6m, eclipsing an increase of £19.8m in
revenue and resulting in a loss of £9.7m. The losses were due in part to the
increased costs of stock-based compensation, it is understood.
Earnings moved from Ireland and the
Netherlands wind up in island havens that levy no corporate income taxes at all.
Eoin Dorgan, a spokesman for the
Irish Department of Finance, declined to comment on
Google’s strategies specifically. “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.
This is a ludicrous statement given that 2
of Ireland's biggest companies are based at a Dublin law firm and are owned by
software giant Microsoft. They are used to collect funds from other overseas
units including income.