The Tax Haven That's Saving Google Billions
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The Tax Haven That's Saving Google Billions
1–10 of 62 posts
Re: The Tax Haven That's Saving Google Billions
#2I'd like to know how much of the $60 billion tax shortfall the US government doesn't receive ends up in being spent by Google (at their discretion) on public works, education etc.
I don't know enough to suggest this is (or isn't) the case, but perhaps this model would allow companies who genuinely want to look after their community to basically choose how money, that would otherwise be tax money, gets spent.
I think lots of people would rather see money spent on public health and education than lots of other areas tax money gets diverted to.
Of course, I'm not so naive as to think that this will take off anytime soon...
Re: The Tax Haven That's Saving Google Billions
#3My knowledge of international corporate tax law is practically nil, but if I understand this correctly, the money sitting in Bermuda is still subject to taxation when it gets brought back into the US; so Google isn't avoiding taxes, but is rather postponing taxes by doing this.
Re: The Tax Haven That's Saving Google Billions
#4My knowledge of international corporate tax law is practically nil, but if I understand this correctly, the money sitting in Bermuda is still subject to taxation when it gets brought back into the US; so Google isn't avoiding taxes, but is rather postponing taxes by doing this.
They can always spend it elsewhere.
Re: The Tax Haven That's Saving Google Billions
#5My knowledge of international corporate tax law is practically nil, but if I understand this correctly, the money sitting in Bermuda is still subject to taxation when it gets brought back into the US; so Google isn't avoiding taxes, but is rather postponing taxes by doing this.
My international corporate tax law knowledge is also practically nil, but I believe there is discussion in Congress about a corporate tax holiday that would allow them to bring money back to the US at a 3.5% tax rate.
Re: The Tax Haven That's Saving Google Billions
#6My knowledge of international corporate tax law is practically nil, but if I understand this correctly, the money sitting in Bermuda is still subject to taxation when it gets brought back into the US; so Google isn't avoiding taxes, but is rather postponing taxes by doing this.
It's subject to U.S. taxation only if Google ever decides to bring it back into the U.S. via a dividend. Alternatively, they can use that cash to fund foreign growth without ever facing US taxation.
Postponing taxes for about 7 years is roughly the same as avoiding those taxes altogether, based on a comparison of the time value of money calculations (because future amounts of the same value are worth relatively less).
Re: The Tax Haven That's Saving Google Billions
#7My knowledge of international corporate tax law is practically nil, but if I understand this correctly, the money sitting in Bermuda is still subject to taxation when it gets brought back into the US; so Google isn't avoiding taxes, but is rather postponing taxes by doing this.
It is not subject to taxation since the money has already been accounted for in Bermuda (where there is no corporate tax). It is effectively the same as money laundering, but then legal and on a much bigger scale.
Re: The Tax Haven That's Saving Google Billions
#8I'd like to know how much of the $60 billion tax shortfall the US government doesn't receive ends up in being spent by Google (at their discretion) on public works, education etc. I don't know enough to suggest this is (or isn't) the case, but perhaps this model would allow companies who genuinely want to look after their community to basically choose how money, that would otherwise be tax money, gets spent. I think…
That's called a charitable deduction, and it's already part of the tax code.
Google isn't using the charitable deduction; it's simply using a loophole to avoid U.S taxation on income earned from non-US sources. Whether this is bad depends on your view on taxation.
Re: The Tax Haven That's Saving Google Billions
#9My knowledge of international corporate tax law is practically nil, but if I understand this correctly, the money sitting in Bermuda is still subject to taxation when it gets brought back into the US; so Google isn't avoiding taxes, but is rather postponing taxes by doing this.
It is not subject to taxation since the money has already been accounted for in Bermuda (where there is no corporate tax). It is effectively the same as money laundering, but then legal and on a much bigger scale.
That's not true at all. It is subject to taxation if the cash is ever repatriated back to the U.S.
That's not money laundering (which is the use of legal business activities to exchange illegaly earned income for legally earned income).
It's legal because the money was technically earned by Google's foreign subsidiaries, which are legally distinct entities. As long as the money isn't repatriated to Google (U.S.), the money isn't subject to U.S. income taxation.
Re: The Tax Haven That's Saving Google Billions
#10My knowledge of international corporate tax law is practically nil, but if I understand this correctly, the money sitting in Bermuda is still subject to taxation when it gets brought back into the US; so Google isn't avoiding taxes, but is rather postponing taxes by doing this.
I don't believe that Google is actually just postponing taxes. Instead, they are also being selective about what money they pay it on. Basically, the money has been obtained in Ireland, sent to the Netherlands, and then Bermuda. So it hasn't touched the US, and they don't owe US taxes. They can then do two things with that money. One, they can bring it into the US, pay taxes on it, and use it to do whatever it is they plan on doing with it, or, two, which I think is more likely, they use it to finance international business, and they never pay US taxes on it. However, there hasn't been any "loss" to the US per se. If anything, it's the Irish who should be up in arms