(USA TODAY) -- By funneling nearly $10 billion in revenue into a Bermuda shell
company last year, Google dodged about $2 billion in income taxes
worldwide, Bloomberg News reports, citing financial records.
off-shore tax shelter - legal in the United States and elsewhere - cut
Google's tax rate nearly in half, Bloomberg says. Bermuda has no
corporate income tax. Bloomberg says the amount saved was about 80% of
the company's pre-tax profit.
In a statement from corporate
headquarters in Mountain View, Calif., Google said that it complies with
all tax rules. The company also said its European investments help
those countries' economies and businesses, and provide thousands of
Last week, Reuters reported
how Amazon has avoided income taxes - $1.5 billion, the IRS claims - by
channeling sales through Luxembourg. In the course of accumulating $2
billion to finance expansion, the Seattle-based retailing behemoth has
also evaded paying hundreds of millions of dollars to European
The European Commission, the executive body of the
European Union, estimates the EU loses around 1 trillion euros - about
$1.3 trillion - each year to tax evasion and avoidance.
Last week, the commission announced an "action plan"
that advised member states to "protect their tax bases and recapture
billions of euros legitimately due." Recommended measures included
drawing up black lists of tax havens and legislation curbing tax abuses.
angry British lawmakers accused Google, Amazon, Starbucks and other
multinationals of engaging in "aggressive" tax avoidance and called for a
Two years ago, Bloomberg reported that
Google used two overseas shelters to avoid billions in income taxes. The
company did so by transferring royalty payments from its Irish and
Dutch subsidiaries to a Bermuda unit, which was simply headquartered in a
local law firm.
Bloomberg writes that last year Google "reported a
tax rate of just 3.2% on the profit it said was earned overseas, even
as most of its foreign sales were in European countries with corporate
income tax rates ranging from 26% to 34%."