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

I'm not American, nor did I study much in economics. I don't get it.

Is the tax paid depending on your liquid cash at end of financial year? I don't understand how you can make sales in the US, then move money offshore to end up not paying tax..

The U.S. tax code is over 6000 pages long. In short, if you have the knowledge or a decent tax accountant, you can do just about anything. This has less to to with basic finance and more to do with the many nuances of existing tax law.

Here, the revenue was attributed to Google's subsidiary in Bermuda, as explained in the linked report. As a result, the taxable funds show up on the balance sheet of the subsidiary instead of Google's, thus avoiding the income taxes. At least, that's how I would think it works, in theory...

Edit: Here's how it works. http://en.wikipedia.org/wiki/Double_Irish_arrangement

A relatively small number of major "left coast" corporations contribute solely to Democrats. Everywhere else big companies hedge their bets, buying off key officials and lawmakers in both parties. For example, Obama would never have gotten elected without Wall Street betting on another bailout. The prez and the banksters exchange knowing winks as Obama lambastes the "1%" every day. The fix is <b>always</b> in.

Actually I think what is happening here is that Google is not repatriating any foreign income back into the states. The US is unique in that income can be taxed multiple times: It's taxed in the country it originated and then it is taxed again by the US once it is repatriated home. I bet that Google set up a shell company in Bermuda for tax purposes only so that it avoid not only foreign taxation but American taxation as well.

There are so many ironies in this story that it would take forever to list them all but I'll list this one: The next time you hear some uberrich Leftist talk about the "rich" needing to "pay their fair share" remember the actions of such stalwart Leftist companies like Google and their actions here. "Rich" does not apply to them but it applies to the "middle class" that Leftists claim to be representing and giving breaks to.

For anyone interested in Google's take on the matter: http://www.telegraph.co.uk/technolo...ed-capitalism-says-chairman-Eric-Schmidt.html

Sad part is, 60 years ago this whole thing would have been a pretty good satire.

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.

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"

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