Taxing Authorities' Internet Cat-and-Mouse Game

12 December 2012 Publication
Authors: Peter Vogel

E-Commerce Times

Google reportedly conducts business in Ireland because the corporate tax rate is 12.5 percent, which is much lower than the rest of the EU. Also to reduce Google’s tax bill even more, it makes royalty payments to a unit in Bermuda. In the meantime, Google reported to the SEC that it generated $4 billion in  sales in Britain in 2011, but reported only $629 million in official filings in Britain.

The fact that the Internet has no boundaries of time or geography has changed the way businesses operate forever. One feature of the Internet is that it has allowed creative businesses to avoid, or at least minimize their tax liabilities.

In particular, Google’s business success means that it has to manage its operations if it wants to minimize its tax burden.

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