A U.S. Senate subcommittee may have spent the better part of Tuesday grilling Apple executives over untaxed offshore fortunes, but Cupertino isn’t the only tech company taking advantage of the same loophole.
Bloomberg reported Wednesday that search giant Google Inc. is among a long list of companies who, like Apple, have set up corporations in Ireland as a way to avoid paying U.S. corporate taxes on income made offshore.
Even as the U.S. Senate Permanent Subcommittee on Investigations puts pressure on Apple to pay income tax on $74 billion made overseas during the last four years, it turns out that Google and Yahoo! are both guilty of the same tactics.
In Google’s case, Mountain View established a pair of tax shelters in Ireland and the Netherlands, referred to as “Double Irish” and “Dutch Sandwich” by tax attorneys. According to the company’s own filings, Google avoids $2 billion in income tax payments to the U.S. each year by shifting profits to Bermuda — a country with no corporate income tax.
Yahoo! also has an Irish subsidiary where its overseas profits are deposited, but claims to be a tax resident of the Cayman Islands rather than Ireland. The report notes that profits totaling “hundreds of million of dollars” have been funneled through the suburban home of the company’s Dutch bookkeeper, where it eventually lands with subsidiaries based on Mauritius and Switzerland.
Apple executives were quick to note that the company does not hold money in the Caribbean as Google and Yahoo! have done, and current U.S. tax laws are based on where a company is incorporated, not where it is actually managed.
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