4 ms·

This is an article from 2010 that's already been submitted to HN in the past: http://news.ycombinator.com/item?id=1815457 http://news.ycombinator.com/item?id=18

This is an article from 2010 that's already been submitted to HN in the past: http://news.ycombinator.com/item?id=1815457 http://news.ycombinator.com/item?id=1815457 Personally, I find the sub-headline misleading. The subhead reads "Google uses a complicated structure to send most of its overseas profits to tax havens, keeping its corporate rate at a super-low 2.4 percent." But I believe that number refers only to Google's overseas tax rate. This more recent article http://news.yahoo.com/googles-tax-rate-still-seems-very-low-213223063.html http://news.yahoo.com/googles-tax-rate-still-seems-very-low-... says that Google's overall tax rate was 22.2% in 2009.

illumen 15y ago
Note, Matt_Cutts works for Google. Don't you think Google should be paying the UK tax on UK profits?
- dsplittgerber 15y ago
  I don't agree at all. First, what exactly are "UK profits" supposed to be? Say Apple has a net margin of 20 % on every iPhone sold. It's designed in California by Americans (most surely several non-native Americans among them), manufactured in China by probably lots of Chinese workers and immigrants, shipped and flown across the world by god knows whom, etc. It's not like it's designed in Brixton, manufactured in Manchester and sold in London only. Which country is supposed to retain the tax on profit on each iPhone sold? The point of sale-country is one alternative. Is it the most logical? Is it equitable and fair (whatever that means)? Second, if your local legislator is just too stupid - or, more accurately, for a lot of reasons - unwilling to close tax loopholes, why on earth should a company be willing to waste shareholder's money by settling a claim (tax) that is not legally binding due to existing loopholes? There is a lot of hypocrisy involved in politicians blaming companies for using tax law loopholes - if they were at all serious about that, they would just write better laws. Sure, it's always playing catch-up with tax lawyers looking for "tax-efficient" structures, but most loopholes are well known among legislators, and they knowingly decide not to close them.
  - umarmung 15y ago
    These sort of tax haven arrangements are commonplace with almost all multinationals, which basically means almost all non-SME corporates these days. There's a very good book on the subject, which is pretty shocking even if you work in finance (but not offshore tax accountancy or law): "Treasure Islands: Tax Havens and the Men Who Stole the World" http://www.amazon.com/Treasure-Islands-Havens-Stole-World/dp/1847921108/ref=sr_1_2?ie=UTF8&qid=1320671026&sr=8-2 http://www.amazon.com/Treasure-Islands-Havens-Stole-World/dp...
mslate 15y ago
Which is still ridiculously well below the stated 35% corporate tax rate in the USA (source--IRS http://www.irs.gov/pub/irs-pdf/i1120.pdf http://www.irs.gov/pub/irs-pdf/i1120.pdf)
- bryanlarsen 15y ago
  But that 35% corporate tax rate is the highest in the developed world, so Google's overseas tax rate is going to be lower than 35% even if they didn't pull anything fancy. Also keep in mind that 35% corporate tax rate is also almost pure fiction too -- standard exemptions, let alone loopholes, are among the best in the world.
- Matt_Cutts 15y ago
  Note: I am only speaking for myself personally, not for my employer. I did a little searching, and http://www.reuters.com/article/2011/07/27/us-microsoft-tax-idUSTRE76Q6OB20110727 http://www.reuters.com/article/2011/07/27/us-microsoft-tax-i... says that in their last fiscal years, - Microsoft had an overall effective worldwide tax rate of 17.5%. - Google's effective tax rate was 21%. - Apple's effective tax rate was 24%. - IBM's effective tax rate was 25%. Then with a bit more digging into (independent Senator from Vermont) Bernie Sanders' twitter feed, I saw: - General Electric had an effective tax rate of -45.3% from 2008 to 2010: https://twitter.com/#!/SenatorSanders/status/132791467994386432 https://twitter.com/#!/SenatorSanders/status/132791467994386... - ExxonMobil had an effective tax rate of -38.3% in 2009: https://twitter.com/#!/SenatorSanders/status/132835853536989186 https://twitter.com/#!/SenatorSanders/status/132835853536989... - Merck had an effective tax rate of -1% in 2009: https://twitter.com/#!/SenatorSanders/status/132927696131985408 https://twitter.com/#!/SenatorSanders/status/132927696131985... - Boeing had an effective tax rate of -1.8% in 2008-2010: https://twitter.com/#!/SenatorSanders/status/132973012763938817 https://twitter.com/#!/SenatorSanders/status/132973012763938... - Verizon had an effective tax rate of -5.4% in 2009 and 2010: https://twitter.com/#!/SenatorSanders/status/132944059814785024 https://twitter.com/#!/SenatorSanders/status/132944059814785... Again, I'm just speaking for myself personally, not on behalf of my employer. My issue with the article was that I felt like it focused on Google when a broader perspective on corporate tax rates would have been more helpful.
barredo 15y ago
> But I believe that number refers only to Google's overseas tax rate It does. It says so in the article.

illumen 15y ago

Note, Matt_Cutts works for Google. Don't you think Google should be paying the UK tax on UK profits?

dsplittgerber 15y ago
I don't agree at all. First, what exactly are "UK profits" supposed to be? Say Apple has a net margin of 20 % on every iPhone sold. It's designed in California by Americans (most surely several non-native Americans among them), manufactured in China by probably lots of Chinese workers and immigrants, shipped and flown across the world by god knows whom, etc. It's not like it's designed in Brixton, manufactured in Manchester and sold in London only. Which country is supposed to retain the tax on profit on each iPhone sold? The point of sale-country is one alternative. Is it the most logical? Is it equitable and fair (whatever that means)? Second, if your local legislator is just too stupid - or, more accurately, for a lot of reasons - unwilling to close tax loopholes, why on earth should a company be willing to waste shareholder's money by settling a claim (tax) that is not legally binding due to existing loopholes? There is a lot of hypocrisy involved in politicians blaming companies for using tax law loopholes - if they were at all serious about that, they would just write better laws. Sure, it's always playing catch-up with tax lawyers looking for "tax-efficient" structures, but most loopholes are well known among legislators, and they knowingly decide not to close them.
- umarmung 15y ago
  These sort of tax haven arrangements are commonplace with almost all multinationals, which basically means almost all non-SME corporates these days. There's a very good book on the subject, which is pretty shocking even if you work in finance (but not offshore tax accountancy or law): "Treasure Islands: Tax Havens and the Men Who Stole the World" http://www.amazon.com/Treasure-Islands-Havens-Stole-World/dp/1847921108/ref=sr_1_2?ie=UTF8&qid=1320671026&sr=8-2 http://www.amazon.com/Treasure-Islands-Havens-Stole-World/dp...

mslate 15y ago

Which is still ridiculously well below the stated 35% corporate tax rate in the USA (source--IRS http://www.irs.gov/pub/irs-pdf/i1120.pdf http://www.irs.gov/pub/irs-pdf/i1120.pdf)

bryanlarsen 15y ago
But that 35% corporate tax rate is the highest in the developed world, so Google's overseas tax rate is going to be lower than 35% even if they didn't pull anything fancy. Also keep in mind that 35% corporate tax rate is also almost pure fiction too -- standard exemptions, let alone loopholes, are among the best in the world.
Matt_Cutts 15y ago
Note: I am only speaking for myself personally, not for my employer. I did a little searching, and http://www.reuters.com/article/2011/07/27/us-microsoft-tax-idUSTRE76Q6OB20110727 http://www.reuters.com/article/2011/07/27/us-microsoft-tax-i... says that in their last fiscal years, - Microsoft had an overall effective worldwide tax rate of 17.5%. - Google's effective tax rate was 21%. - Apple's effective tax rate was 24%. - IBM's effective tax rate was 25%. Then with a bit more digging into (independent Senator from Vermont) Bernie Sanders' twitter feed, I saw: - General Electric had an effective tax rate of -45.3% from 2008 to 2010: https://twitter.com/#!/SenatorSanders/status/132791467994386432 https://twitter.com/#!/SenatorSanders/status/132791467994386... - ExxonMobil had an effective tax rate of -38.3% in 2009: https://twitter.com/#!/SenatorSanders/status/132835853536989186 https://twitter.com/#!/SenatorSanders/status/132835853536989... - Merck had an effective tax rate of -1% in 2009: https://twitter.com/#!/SenatorSanders/status/132927696131985408 https://twitter.com/#!/SenatorSanders/status/132927696131985... - Boeing had an effective tax rate of -1.8% in 2008-2010: https://twitter.com/#!/SenatorSanders/status/132973012763938817 https://twitter.com/#!/SenatorSanders/status/132973012763938... - Verizon had an effective tax rate of -5.4% in 2009 and 2010: https://twitter.com/#!/SenatorSanders/status/132944059814785024 https://twitter.com/#!/SenatorSanders/status/132944059814785... Again, I'm just speaking for myself personally, not on behalf of my employer. My issue with the article was that I felt like it focused on Google when a broader perspective on corporate tax rates would have been more helpful.

barredo 15y ago

> But I believe that number refers only to Google's overseas tax rate It does. It says so in the article.