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Google's 'Dutch Sandwich' Shielded 16 Billion Euros From Tax (bloomberg.com)

Posted by msmash on from the what's-happening? dept.

Google moved 15.9 billion euros ($19.2 billion) to a Bermuda shell company in 2016, saving at least $3.7 billion in taxes that year, regulatory filings in the Netherlands show. From a report: Google uses two structures, known as a "Double Irish" and a "Dutch Sandwich," to shield the majority of its international profits from taxation. The setup involves shifting revenue from one Irish subsidiary to a Dutch company with no employees, and then on to a Bermuda mailbox owned by another Ireland-registered company. The amount of money Google moved through this tax structure in 2016 was 7 percent higher than the year before, according to company filings with the Dutch Chamber of Commerce dated Dec. 22 and which were made available online Tuesday.

20 of 289 comments (clear)

  1. Nice by tripleevenfall · · Score: 5, Funny

    This dovetails nicely with all the "We love social justice!" TV commercials that Google was running during football games this past weekend.

    1. Re:Nice by sycodon · · Score: 5, Insightful

      Instead of Don't be Evil it's Don't Pay Taxes.

      --
      When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
    2. Re:Nice by Midnight+Thunder · · Score: 5, Funny

      Instead of Don't be Evil it's Don't Pay Taxes.

      Nah, it really comes down to "what do you really mean by evil and in what jurisdiction?"

      --
      Jumpstart the tartan drive.
    3. Re:Nice by fluffernutter · · Score: 4, Informative

      You're right, I would much rather everyone on my street make an individual trip to the garbage dump site rather than having those pesky garbage men around. It all seems too simple and organized, so it must be a conspiracy.

      --
      Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
    4. Re:Nice by Anonymous Coward · · Score: 5, Insightful

      Google spends money on AI research, robotics, parallel computing, and information access.

      cut

      I prefer that Google keeps as much money as they can.

      Google can do that precisely because of the having the security of a working democratic nation state in which to operate. You think they could do all the AI research, robotics, parallel computing and information access in a failed state like Somalia or Yemen ? That has a cost, it's called taxes. Don't wanna pay taxes ? You're free to offshore your entire company to Somalia. Lets see how that works out ok ?

    5. Re:Nice by GameboyRMH · · Score: 4, Insightful

      The government spends money on wars, prisons, corporate welfare, and subsidies for a bloated and wasteful healthcare system.

      Also infrastructure, education, public safety, human welfare, law enforcement, and unprofitable scientific research, but who needs that stuff right?

      Google really needs that money, after all. CEOs' megayachts have to fly now.

      --
      "When information is power, privacy is freedom" - Jah-Wren Ryel
    6. Re:Nice by jenningsthecat · · Score: 4, Insightful

      The government spends money on wars, prisons, corporate welfare, and subsidies for a bloated and wasteful healthcare system.

      I prefer that Google keeps as much money as they can.

      You've made a mostly-insightful comment which I mostly agree with. Unfortunately, it contains a rather glaring contradiction. Surely Google, (along with other corporations), being allowed to keep "as much money as they can", represents a major portion of "corporate welfare"?

      Governments need a very loud wake-up call when it comes to their budgetary priorities, but letting companies like Google dodge taxes is not the appropriate solution. We simply need better governments making better decisions, doing a better job of enforcing corporate taxation. To do that we need to realize that the 'military-industrial complex' that Eisenhower warned about, has either morphed into, or expanded to include, the 'corporate-governmental' complex. Then we need to set about dismantling that whole structure and making sure that the constituent entities remain separate and opposed, aka 'balanced'. Citizens need to organize in the way that unions have. I don't love unions, but they are necessary and they came into being for valid and important reasons. It's time for a national 'Citizens' Union', with various locals organizing campaign contributions and voting blocs at Federal, State, and local levels. I see numerous flaws in my suggestion, but I have yet to hear of any better alternatives, and at this point I think that a Citizens' Union would be much better for many more people than the status quo is.

      --
      'The Economy' is a giant Ponzi scheme whose most pitiable suckers are the youngest among us and the yet-unborn.
  2. The real injustice here by Anonymous Coward · · Score: 5, Insightful

    Is that perfectly-legal tax-avoidance strategies like this one aren't available to lower and middle class employees.

    1. Re:The real injustice here by Wootery · · Score: 5, Funny

      If only western governments were starved of the tax funds they need in order to function! We'd finally have our libertarian utopia!

  3. Re:How is this not fraud? by deadweight · · Score: 3, Insightful

    If the law allows this and the tax forms are turned in and all the tax agencies say "looks good", it is not illegal. Don't blame Google for being smart, blame Holland, Bermuda, and Ireland for being dumb.

  4. Re:How is this not fraud? by 110010001000 · · Score: 4, Insightful

    What loopholes? Corporations write the tax rules. This is all intentional. Why do you think corporations donate to political campaigns?

  5. If the laws allow them to do this... by linuxguy · · Score: 3, Insightful

    If the law allows them to do this then what are you complaining about? Don't like it? Change the laws.

    1. Re:If the laws allow them to do this... by Anonymous Coward · · Score: 5, Insightful

      I can't afford to bribe politicians like google can.

    2. Re:If the laws allow them to do this... by Anonymous Coward · · Score: 3, Insightful

      If the law allows them to do this then what are you complaining about? Don't like it? Change the laws.

      You seem to be under the mistaken notion that US law is not bought and paid for by those with money, be it corporations, or people so rich that the next 5 generations of my family are unlikely to earn in their entire life times together what one of these rich people earn in a single year.

      My vote does not matter.

      I cannot change any laws that would influence those with money or power, because I am not one with money and power. I am the lower class and even when the people in what is effectively a united voice speak out, it is ignored (i.e. Net Neutrality).

      My voice is unheard.

      I am allowed only those freedoms that the oligarchy deems fit for me, enough minor and pointless control that I do not rise up in arms against them, but not enough that I may encroach upon their gild thrones of power or cause even the slightest change for them.

  6. Re:How is this not fraud? by johannesg · · Score: 5, Informative

    The Netherlands gets a little bit of extra money from this, yes. Of course those billions do get added to our GNP, which means that any costs that are GNP-related (such as EU-membership, NATO membership, and third world aid) also go up immediately. I don't know how much Google is paying, but it's not impossible that this is a netto loss for the Netherlands.

    Of course we gets lots of high tech jobs... Wait, what? Zero employees? Right, so that's pointless then.

    Let Google pay the same on its income as I (Dutch person, living and working in the Netherlands) do. That's _52%_ income tax, for those interested... Corporations are people. Let them pay income tax like the rest of us.

  7. Re:Euphemisms? by HornWumpus · · Score: 4, Informative

    You'll regret looking up _anything_ that you have to goto the urban dictionary to find.

    --
    John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
  8. Stop Taxing Profits! by Wrath0fb0b · · Score: 4, Interesting

    The continued machinations that everyone has gotten into with respect to taxing profits feels just like the epicycles used in the heliocentric models -- continued added complexity to make something work that at base doesn't make sense.

    At base, the truth is that profit is an interpretive value. It's not a basic arithmetic concept like gross revenue or net revenue -- it's a derived value that requires subjective judgment to assign to the inputs. As such, you can create more and more complicated rules that never really continues. Like epicycles, the corrections and adjustments continue forever.

    It would seem totally logical that the simplest and least-subject-to-perversion method of taxation would be to chose to tax a value that requires the absolute minimum subjective interpretation: either a gross revenue tax or a consumption tax. Both can be made arbitrarily progressive and both are virtually impossible to game.

    Instead we go on and on trying to tax an elusive concept . . .

  9. Re:Good for them. by tsa · · Score: 4, Insightful

    Maybe in the US, but in civilized countries we like our good roads and social security and pensions and medical insurance and police and so on and so forth. So we like corporations to pay their taxes.

    --

    -- Cheers!

  10. State Department by JBMcB · · Score: 4, Interesting

    The best part about all of this is it was the US State Department's idea to set up Ireland as a tax haven. Back in the late 40's when Ireland was basically broke, the US and UK got together with them to figure out how to fix their economy. The US brought up a bunch of ideas, and setting up a tax haven was one of them. So Ireland went ahead and did it.

    So it's a bit suspect when the US congress calls CEOs onto the floor and lambastes them for taking advantage of something the US told Ireland to do.

    --
    My Other Computer Is A Data General Nova III.
  11. riddle me this by tacokill · · Score: 3, Interesting

    Who pays corporate taxes? Answer: the corporations. And who owns the corporations? Answer: the shareholders.

    Why don't we just tax the shareholders and skip the corporate tax?