Google & taxes
Whoever is in charge of European tax governance, whether it is by the countries themselves or the European Union, is, well, crazy. They’ve made it entirely possible for pan-European companies to funnel back profits into EU jurisdictions which have a low corporation tax regime. And yet the press in each country bleats like a sheep, every time someone points this fact out. Today’s controversey was that Google, which has around 90% market share of the UK search market and a large share across other European countries, will not pay any corporation tax on its £1.6bn advertising revenues in Britain. It has a network of subsidiares across Europe, all of them feeding back to its European HQ in Ireland where it does pay corporation tax.
2. L'impôt sur les sociétés : le problème de la localisation de la création de richesse et de l'optimisation fiscale L'impôt sur les sociétés est au coeur des difficultés soulevées par la localisation de la richesse créée par le commerce électronique. En effet, le système international en vigueur pose le principe selon lequel les revenus produits sur un territoire y sont taxés. Mais, la dématérialisation des services pose la question du lieu où sont créés les revenus, battant ainsi en brèche le principe fiscal français de territorialité de l'impôt.
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Google Inc. cut its taxes by $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda. Google’s income shifting -- involving strategies known to lawyers as the “Double Irish” and the “Dutch Sandwich” -- helped reduce its overseas tax rate to 2.4 percent, the lowest of the top five U.S. technology companies by market capitalization, according to regulatory filings in six countries.
Google's European headquarters in Dublin, where it moved three years after in an apparent bid to profit from Ireland's controversial low corporate tax rate. Photograph: Bloomberg via Getty Images WPP chief executive Sir Martin Sorrell revealed on Thursday that he was probably going to return the firm's tax base to the UK , three years after it moved to Dublin in an apparent bid to profit from Ireland 's controversial low corporate tax rate. Corporate tax – which is 12.5% in Ireland, less than half the current UK level of 28% – has been the subject of some blunt discussion in Europe in the past few weeks: with Nicolas Sarkozy and Angela Merkel have demanded that Ireland increases the rate in return for a renegotiation of its IMF/EU bailout. But any compromise on the corporate tax rate is off the agenda at today's European summit.
The double Irish arrangement is a tax avoidance strategy that U.S. based multinational corporations use to lower their corporate tax liability. The strategy uses payments between related entities in a corporate structure to shift income from a higher-tax country to a lower-tax country. It relies on the fact that Irish tax law does not include U.S. transfer pricing rules. [ 1 ] Specifically, Ireland uses territorial taxation , and hence does not levy taxes on income booked at subsidiaries of Irish companies that are outside of the state. [ edit ] Overview Typically, the company arranges for the rights to exploit intellectual property outside the United States to be owned by an offshore company .