Google's US$2bn tax bill dodge sparks outrage
Internet search giant used legal tactics to route revenues to Bermuda to side-step levies
Google avoided about US$2 billion in worldwide income taxes last year by shifting US$9.8 billion in revenues into a Bermuda shell company, filings show.
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 per cent of Google's total pretax profit last year.
The increase in Google's revenues routed to Bermuda, disclosed in a November 21 filing by a subsidiary in the Netherlands, could fuel the outrage spreading across Europe and in the US over corporate tax dodging. Governments in France, the United Kingdom, Italy and Australia are now probing Google's tax avoidance.
Last week, the European Union's executive body, the European Commission, advised member states to create blacklists of tax havens and adopt anti-abuse rules.
Tax evasion and avoidance, which cost the European Union €1 trillion (HK$9.9 trillion) a year, are "scandalous" and "an attack on the fundamental principle of fairness," Algirdas Semeta, the EC's commissioner for taxation, said in Brussels.