Google has managed to lower its overseas tax rate more than its peers in the technology sector. Its rate since 2007 has been 2.4 percent.
In Bermuda there's no corporate income tax at all. Google's profits travel to the island's white sands via a convoluted route known to tax lawyers as the "Double Irish" and the "Dutch Sandwich." In Google's case, it generally works like this: When a company in Europe, the Middle East, or Africa purchases a search ad through Google, it sends the money to Google Ireland. The Irish government taxes corporate profits at 12.5 percent, but Google mostly escapes that tax because its earnings don't stay in the Dublin office, which reported a pretax profit of less than 1 percent of revenues in 2008.
Irish law makes it difficult for Google to send the money directly to Bermuda without incurring a large tax hit, so the payment makes a brief detour through the Netherlands, since Ireland doesn't tax certain payments to companies in other European Union states. Once the money is in the Netherlands, Google can take advantage of generous Dutch tax laws. Its subsidiary there, Google Netherlands Holdings, is just a shell (it has no employees) and passes on about 99.8 percent of what it collects to Bermuda. (The subsidiary managed in Bermuda is technically an Irish company, hence the "Double Irish" nickname.)
Saturday, October 23, 2010
Do no evil. Pay no tax. Excerpts:
Posted by Blinding Insight at 9:16 PM
Monday, October 18, 2010
An excerpt from power dynamics, free market and inflation
...the most powerful entity in a sector has the ability to set wages and benefits in a way independent of the market for labor if it controls a sufficiently large amount of the sector, assuming a sufficient supply of workers in the sector...More reading on economic theory.
Posted by Blinding Insight at 4:18 AM
Sunday, October 17, 2010
Rest In Peace, Benoit Mandelbrot. An excerpt:
In a fascinating talk at TEDGlobal in 2007, mathematician Ron Eglash shows how, in cultures across the African continent, fractals are a recurring shared technology in architecture, design and culture.
from the TED Blog: Our Q&A with TED Fellow Sean Gourley, whose work hints at a fractal pattern in global war.
Posted by Blinding Insight at 12:05 PM