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Google saved $2B in taxes in 2011 by sending revenue to Bermuda

By Shawn Knight
Dec 11, 2012
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  1. gingerbill

    gingerbill TS Enthusiast Posts: 174   +12

    I hope these tax loopholes are closed and they have to pay every penny of tax they should be doing . Disgusting they can get away with it. Were I can I will avoid any company using these methods.

    Of course the goverments are to blame for allowing it to happen , it is shameful.
     
  2. pmshah

    pmshah TS Rookie Posts: 82

    This only goes to show that the individuals assigned to write tax laws are either incredibly stupid or incredibly brilliant. Most likely the latter with some major palm greasing.

    Here in India a corporation is liable to tax on ALL income, global as well as local. An individual is liable to global income if he has been in the the country for 180 days or more during a financial year. This is predefined for ALL, 1st April to 31st March. No exceptions are allowed. Even multinationals have to follow this, regard less of the parent companies financial year regime.

    I have first hand knowledge of one German major, in electrical engineering field, using such tax shelter / haven to avoid paying tax. They bid for and win big projects. Then they subcontract it to their subsidiary registered in tax haven at a price just slightly below the winning bid. This subsidiary then further subcontracts the project to their Indian arm of the parent company at a price that would leave the Indian arm with very marginal profit. Ultimately the big fat profit accrues in the subsidiary located in the tax haven.

    Another example is in IT department of software and hardware designing. Most major companies have development setup in India. (TI for example does almost all its DSP designing here in India.) Patents of these designs are however owned by the parent company. Income derived from licensing of these patents are collected by the parent country in tax haven countries, depriving India, as also the US, of legitimate tax.

    As Gandhi once said "there is enough for everyone's need but not enough for even one man's greed"
     
  3. Pan Wah

    Pan Wah TS Enthusiast Posts: 134   +27

    Well played, I could do with a loan of their accountants. ;)
     


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