Report: Google Avoid $2B Tax Using Company

December 10, 2012

Internet giant Google avoided about $2 billion in worldwide income taxes in 2011 by shifting $9.8 billion in revenues into a Bermuda shell company, Bloomberg reports.

“By legally funneling profits from overseas subsidiaries into Bermuda, which doesn’t have a corporate income tax, Google cut its overall tax rate almost in half. The amount moved to Bermuda is equivalent to about 80 percent of Google’s total pretax profit in 2011,” the Bloomberg report said.

The accounts, seen by Bloomberg, show that Google shifted $9.8 billion in revenues in 2011 into a Bermuda-based company. The move, which is perfectly legal, was disclosed in the November 21 filing by a subsidiary in the Netherlands.

The story is being carried by numerous international media outlets, with some saying it “could fuel the outrage spreading over corporate tax avoidance.”

Read More About

Category: All, Business, News, technology

Comments (23)

Trackback URL | Comments RSS Feed

  1. Out n about says:

    so do they need an employee to run this office to keep their paper work straight…would gladly work for as little as 0.01% ($200,000) of their Worldwide Income tax savings.

  2. Family Man says:

    I think we’ve found Vince Ingham’s “secret stash of cash”.

  3. Kathy says:

    If they don’t move it to Bermuda they will move it somewhere else. It is a global economy out there right now and if they can save the shareholder money, they will do it. I don’t think the US fully grasps this concept yet.

    If they say you can’t do business in America because you are unpatriotic and you are not footing your full tax bill, they will take the remaining 20% and move out. Where will this leave the US?

    They are caught between a rock and a hard place, but they should be trying to attract business to come back on shore, rather than trying to hunt them down and make them feel “Un-American!”

    At the end of the day, does anyone really enjoy paying taxes???

    • USA says:

      Wow!! You have found the elusive “concept” we “Americans” just can’ t seem to grasp. I’m so glad we have an average Bermudian to point it out. I’ll relay this right up to the O’man himself….

      Fix your own problems ya @ss!!

      • Come Correct says:

        “Fix your own problems ya ass”

        Ironic how that’s a very Bermudian thing to say. Did you learn how to speak to women like that in the US of A or did you take a page out of our book? I’d come with the typical response of fix your own problems before commenting on others but in the land of the most corrupt country on the face of the planet I’d say you’re a little too late. Unfortunately Americans don’t realize that the words freedom and liberty are nothing but fluff since you have neither. Cuba and Russia must be scratching their heads as to how you fool an entire nation into believing they live in a democracy while dictating what they can and can not do, must be all the bright lights, fire works and a good ol’ American hoora. Honestly I hope American is successful in their endevours in the middle east, despite the mass innocent casualties, because if not, my little island sinks with your greedy nation. Ya…STFU and go eat a baconator.

      • Micro says:

        Lol. She is right…

      • theothersidebda says:

        Actually I’m pretty sure the vast majority of Americans actually don’t grasp that concept. The system is broken and not just for corporate tax. Taxation on worldwide income for individuals is also a ludicrous concept only employed by (I think) one or two other countries beside the US. As I said, the whole system is broken and no, most people don’t ‘get it’.

        And I’m guessing from your response that you somehow feel you are better/smarter than the ‘average’ Bermudian (or American) for that matter?…

  4. Y-Gurl says:

    Bermuda, tax haven, unsafe, bad transportation, expensive, boring, and don’t get robbed the Poice will never find the robber, and coming soon….Perinchief’s Bermuda defense force, another world…oh yes!

  5. US Observer says:

    USA – Kathy is right actually and the O’man and everyone under him are very aware of this and would agree that this is within the law. Keep in mind that the US and Bermuda share the same bed.

  6. US Observer says:

    So I would like to know, what percentage (or fees) of the 9.8 billion does Bermuda gain by having open arms? Do I make myself clear?

    • C.B.A says:

      Probably none of it directly, but it helps our economy run because it needs lawyers to set up the company, the management company takes fees, the flights and hotels make money whenever there is a board meeting, etc. Bermuda needs to protect these companies to the best of our abilities.

    • Micro says:

      Very little I imagine.

    • Building a better Bermuda says:

      We do not tax them on the money they make outside of our jusitiction, that is why they bring it here to begin with. They contribute to our economy by hiring local lawyers, accountants, business managers and the nominal business registration fee. As pointed out, there is also board meeting visits, staying in local hotels, airport fees if they use private jets to get hear. We simply are greedy enough to say we want them to pay taxes on the $9.8 billion they didn’t make hear. We do work closely with US authorities to help them catch those who use our island to commit fraud.
      The US should be somewhat grateful for our structure, as it allows reinsurance companies to keep their taxation overheads down (these are the companies that insure US insurance companies and big buildings and businesses). Should the US change the tax laws to make them pay income tax to the US, I shudder to think what this would do to increase insurance premiums in the US.

      Point being is, and you probably won’t believe this, that it works for you too, so don’t knock it.

  7. gessh says:

    Too bad we couldn’t take a percentage out of that and use to help our little island.

  8. Buttons says:

    Who cares? one of many, its just that its google, so we are all interested.

  9. Just Us says:

    Is that money physically in Bermuda?

    • John says:

      If you’re talking about the actual hold-in-your-hand cash, then no.

    • Rick Rock says:

      Are you asking whether the 2bn dollar bills have been packed up in boxes and shipped here?

  10. Blurt says:

    If a comany operations makes money and pays taxes in China on Chineese earnings, part of those earnings are invested through a Bermuda company snd never even go to the US, why should the comany thats already been taxed, suddenlyay US tax, i.e. pay tax twice. The earnings have nothingo do with the US…..just a thought.

    • Ben Dover says:

      Good point, Blurt.

      So, Google has billions of dollars of revenue originating from Bermuda? Has the Swizzle been advertising big time? Those earnings has s.f.a. to do with Bermuda… get it?

  11. longtail says:

    Blurt is correct. The $2b that Google has ‘avoided’ may be purely in the eyes of the US taxman, who would like to tax international corporations twice over – i.e. for their earnings that have already been taxed in other jurisdictions. The sad part is that there can be a backlash against Bermuda…. if you think the Ewart Brown Party has done a lot of fiscal damage to Bermuda you haven’t seen nothing yet!!!!