Stumbled on an interesting article about France now going after some of these same companies for their tax avoidance efforts. Amazon, Apple, Facebook and some others are using the same basic accounting methods in Europe according to the report, but Google is the current public target for French revenue agents. The description of how intricate the tax rate minimizing efforts are is impressive:
Google’s European HQ is called Google Ireland Holdings. It is the owner of Google Ireland Limited. Google Ireland Limited receives the revenue from European subsidaries. But, in order to lower the tax rate, Google Ireland Limited pays billions of royalties to Google Ireland Holdings. In 2011, it was $4.6 billion. It drastically lowers the profit of Google Ireland Limited.
Despite the name, Google Ireland Holdings’ cost center is in Bermuda and is called Google Bermuda Unlimited. In Bermuda, corporate tax doesn’t even exist. But there is a tax if you want to transfer big sums from Ireland to Bermuda. That’s where the Netherlands are needed.
If you transfer money from Ireland to the Netherlands, then to Bermuda, there is no tax. Google Netherlands Holdings BV, you guessed it, is a subsidiary that has the sole function of transferring money from Ireland to Bermuda.
There is another tax to transfer to the U.S. Currently, Google and other big Internet companies keep the money in Bermuda. $1,400 billion are stuck there according to the Win America Campaign, a lobbying action to remove the tax between Bermuda and the U.S.
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Stumbled on an interesting article about France now going after some of these same companies for their tax avoidance efforts. Amazon, Apple, Facebook and some others are using the same basic accounting methods in Europe according to the report, but Google is the current public target for French revenue agents. The description of how intricate the tax rate minimizing efforts are is impressive:
Google’s European HQ is called Google Ireland Holdings. It is the owner of Google Ireland Limited. Google Ireland Limited receives the revenue from European subsidaries. But, in order to lower the tax rate, Google Ireland Limited pays billions of royalties to Google Ireland Holdings. In 2011, it was $4.6 billion. It drastically lowers the profit of Google Ireland Limited.
Despite the name, Google Ireland Holdings’ cost center is in Bermuda and is called Google Bermuda Unlimited. In Bermuda, corporate tax doesn’t even exist. But there is a tax if you want to transfer big sums from Ireland to Bermuda. That’s where the Netherlands are needed.
If you transfer money from Ireland to the Netherlands, then to Bermuda, there is no tax. Google Netherlands Holdings BV, you guessed it, is a subsidiary that has the sole function of transferring money from Ireland to Bermuda.
There is another tax to transfer to the U.S. Currently, Google and other big Internet companies keep the money in Bermuda. $1,400 billion are stuck there according to the Win America Campaign, a lobbying action to remove the tax between Bermuda and the U.S.