New Google Mantra: Pay Less Taxes
from the if-the-tax-bill-fits dept
theodp writes "Forbes reports that Google has joined the ranks of Microsoft, Dell, Intel and others who are reducing their tax rates dramatically by crediting profits to new Irish operations. Ireland offers a tax exemption on patent income and a rock-bottom corporate tax rate of 12.5%, compared to 35% in the US. Google's expansion in Ireland "is not tax-related," insisted a Google exec, although a recent Google SEC filing stated "our effective tax rate will decrease to approximately 30% in 2005 from 39% in 2004, primarily because we expect that our Irish subsidiary will recognize proportionately more of our earnings." Heck, even Steve Ballmer finds it disingenuous to pretend it's not about the taxes!" We covered Microsoft's use of the Irish tax dodge last month. Still, is there anything really wrong with this? It's natural arbitrage. In a global economy, business goes to the most business friendly regions.