Google avoids 2 billion dollar tax via Bermuda

Google have avoided paying 2000 million dollars (about 1,550 million Euros) with respect to taxes, to by shifting a shell company in Bermuda 9900 billion, double the previous three years.

They were successful in cutting down the ratio of the proposed tax to reportedly half value after legally funnelling profits from their overseas subsidies into Bermuda, which does not have corporate income tax.

The amount sent to Bermuda is equivalent to 80% of gross profits last year while France, Germany, UK, Italy and Australia are the ones at the forefront of changing their national laws to prevent Internet companies continue
leaking through its loopholes to avoid further tax burdens.

"The fiscal strategy of Google and other multinationals is a deep shame for governments across Europe. Political awareness is now being created in the UK and to a lesser extent in other parts of Europe. People understand
that if Google does not pay someone has to pay or cut public services." Richard Murphy, director of Tax Research was quoted as saying. 

Google scrupulously adhere fiscal laws, so that countries must change their laws to prevent the same behaviour. Last year, Google paid 3.2% tax on their profits, despite the majority of their revenue came from European countries,
where the tax rate ranges from 26% to 34%.

Google uses the exception of Ireland (12.5%), also a country of the European Union, for all European contracts are signed with his Irish office, although the origin of the money is in other countries. This means
that expenses are charged to each local office, but revenues are always in the Irish headquarters.

Only the UK, Google’s second largest market, generates 11% of sales from search engine, according to company documents. However, Google paid about 8 million Euros in taxes in that country.

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Posted by Farasat Ali on Dec 14 2012. Filed under Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry