Google's (legal) $60B tax evasion
Google ought to give its accountants a raise. 
According to a startling new report from Bloomberg, some creative accounting between the tech giant’s international divisions meant the company’s corporate tax rate shrunk to just 2.4 per cent overseas – as much as 23 per cent less than other major businesses are forced to pay.
By one U.S. professor of economics’ estimate, such elusive practices may have cost the American government some $60 billion in tax revenue.
Now, before we dive into the Bloomberg report – which is as complicated as it is lengthy – it stands to note Google has done nothing illegal in its tax methods. Income shifting, as its known in the corporate world, is a “very common” method among international businesses, notes one U.K.-based tax expert.
Still, that’s not to say Google’s schemes haven’t fallen under heavy criticism.
As per the Bloomberg report, the search engine has been able find loopholes that, by moving many of its foreign profits through Ireland and the Netherlands to Bermuda, prevent it from exposure to high tax corporate rates. (Check out this interactive graphic to see a more detailed explanation which, frankly, is too comprehensive for this space.)
What Google’s methods, however common they may be, have done is expose several glaring oversights in the global tax system.
And they’ve done that by Google’s being so much more effective at the legal tax evasion – which gets catchy nicknames in the accounting community, such as the “Double Irish” and the “Dutch Sandwich” - than other major tech businesses.
Of the top five U.S. tech companies by market cap (Google, Apple, Microsoft, IBM and Oracle), the former’s 2.4 per cent tax rate was far and away the lowest of the group – the others, from 2007 to 2009, ranged between 4.5 per cent and 25.8 per cent.
Perhaps worse, still, for Google’s PR is the nasty reaction that’s followed the California-based tech giant’s (understandable) reluctance to hand over tax dollars to the U.S. government.
One New York professor said Google is “flying a banner of doing no evil, and then they’re perpetuating evil under our noses. Who is it that paid for the underlying concept on which they built these billions of dollars of revenues? It was paid for by the United States citizenry.”
Adds one U.S. tax lawyer: “The (tax) system is broken and I think it needs to be scrapped. Companies are getting away with murder.”
So, who’s to blame? The international corporate tax system, which allows such expensive discrepancies to take place, or companies such as Google, who take full advantage of them?
By Jason Buckland, MSN Money
Posted by: j | Oct 24, 2021 5:49:14 PM
both are responsible, wouldn't be so bad if they took all the profits from google and gave to the ones that need instead of themselves
Posted by: Tazz | Oct 25, 2021 12:07:05 AM
they sure know how to cry and infringe in personnal life and dont care about it.
why would it be differant withg tax they laught all the way.
if they dodge this tax for real just collect it and put it in the medical and socilals services to help the needy
Posted by: K | Oct 25, 2021 4:13:40 PM
Think it's likely the IRS's own fault -
"Google reached an agreement with the Internal Revenue Service in 2006, allowing it to license to a subsidiary the offshore rights to its intellectual property for undisclosed fees. U.S. companies have an incentive to set such prices low, reducing their taxable income at home"
What did they think Google would be trying to do this for?