Dutch Sandwich
December 28, 2010 by USA Post
Dutch Sandwich, It is a cocktail of a new genus. Still unknown but likely to attract fans from around the world. Unlike the Irish coffee, the “Double Irish” do not drink and prepares discreetly. Not in pubs, but in the offices of the best tax lawyers padded on the planet. A provision which actively participates in tax charms of Ireland. And the government, whose austerity budget is being discussed in Parliament since Tuesday, mostly does not want to jeopardize.
Google, which proclaims in its charter does not “do evil”, tried the Double Irish and have at it. By installing close to the Grand Canal in Dublin’s European headquarters and 1,800 employees, the search has not only benefited from a tax rate on profits (12.5%) and legislation intellectual property among the lowest in Europe. He managed to bring the taxation of earnings for its operations outside the United States to 2.4%, the lowest tax rates of the five largest companies in the U.S. high-tech. “It’s a feat to have reduced the taxation of benefits so low,” said an American lawyer who said that the corporate tax is 35% overseas and that the practice of tax optimization cost up $ 60 billion per year in lost revenue to U.S. federal government.
How Has Google done to save $ 3.1 billion (2.3 billion euros) in three years as revealed by a very detailed survey of Bloomberg? The company has used a montage already adopted by many multinationals operating in Ireland, including Facebook and Microsoft. This Double Irish is a process that plays on transfers of profits between companies registered in Ireland, supplemented by a “Dutch Sandwich (Sandwich Dutch) which is to be transferred, via the Netherlands, the profits of the entities into the Irish Bermuda.
Complicated? Not really. First stage of assembly: it is established that Google Ireland Holdings, whose parent company is domiciled in Bermuda (Caribbean tax haven), which holds the patent rights developed in the United States (search engine system auction online advertising) and group brand. The other Irish subsidiary, Google Ireland Ltd, manages all activities in Europe, Middle East and Africa and concentrates 88% of $ 12.5 billion in sales cashed outside U.S. territory. To pay almost no tax on profits, Google Ireland Ltd will repay the form of royalties (5.4 billion dollars) the bulk of its profits to Google Ireland Holdings, whose portfolio of patents is the origin the fortune of the search engine. And they’re not very well since the Irish tax provides minimal taxation on royalties generated on its soil by the intellectual property, and even tax-free royalties donated to some members of the EU and the Netherlands.
There is activate the “Dutch sandwich” and to channel it all through Google Netherlands Holdings BV, which will then pay the amounts to 99.8% in a shell in Bermuda. Based in Amsterdam, the Dutch subsidiary does not count any employee. As for the various entities domiciled in Bermuda by Google, they are directly managed by lawyers and do not publish any accounts as allowed by the law of this micro-state, Bloomberg tells us. As well said the British accountant Richard Murphy, who founded a group for Tax Justice, “the sandwich does not leave any tax revenue in the tooth.”
At Google, whose platform centralizes Irish advertising revenue mainly accumulated in fifty countries (including France) to tax systems less advantageous than that of Eire, explains that the company complies with the letter ‘all taxation countries where it operates, including that of Ireland. “The company also argues that Dublin has become “the multicultural capital of Europe and the Internet provides an ideal framework to enable Google to grow.” For the record, Google has declared for the first time in France, in 2009 a turnover of 51.9 million euros. A ridiculous result that only a tiny portion of the revenue from its activities in France. “Do not be evil”…
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