How Google Avoids Paying Billions in Taxes

How Google Avoids Paying Billions in Taxes

Saint George : Bermuda | Oct 21, 2010 at 6:06 PM PDT
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'Double Irish' and 'Dutch Sandwich' maneuvers save big bucks

Google has shaved a staggering $3.1 billion off its tax bill over the last three years by shuffling its earnings through Ireland, the Netherlands, and Bermuda, Bloomberg reports. Using common maneuvers like the “Double Irish” and the “Dutch Sandwich,” the search giant has brought its overseas tax rate down to just 2.4%, the lowest of the top five US tech companies. Quite a feat, says a former Treasury Department official, considering it operates "throughout the world mostly in high-tax countries where the average corporate rate is well over 20%."

That international maneuvering (which is fairly involved; read the entire piece for the breakdown), in turn, shaved Google's overall effective tax rate to 22.2% last year. Countless companies around the world use such arrangements—Facebook, for example, is prepping a similar setup through the Cayman Islands. But Google’s efforts are somewhat ironic, Bloomberg notes, since taxpayers funded the Stanford research that helped create the company. Google is “flying a banner of doing no evil,” complains one business professor, “and then they’re perpetrating evil under our noses.”

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How Google Avoids Paying Billions in Taxes
In this photo taken Friday, Oct. 8, 2010, a sign at Google headquarters in Mountain View, Calif. is shown
Jay-ar Mendoza is based in Manila, National Capital Region, Philippines, and is a Stringer on Allvoices.
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News Stories

  • Google Tax Scandal
    Guys, can you create an app for that I'd like to pay 2.4% tax too! From Bloomberg News : Google Inc. cut its taxes by $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to...
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    Thu Oct 21 64 posts in the last 24 hours Get Gawker in your inbox: Please enter your email address...Google shaved $3.1 billion off its taxes the past three years with elaborate overseas tax shelters known as "the Double Irish" and "the Dutch...
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