There was no sadness - taxes met: how and why Google had to pay $ 185 million in bills in the UK

Time passes, nothing changes , at least with respect to the world's first Internet company and the second by market capitalization. Since the large (so tempting to write "oligarchic", in the light of the events of recent years), the Internet business breaks traditional ideas about the structure of not only the corporate structure and management (and therefore tax deductions), but also how the customer consumes and where pays for that, or another, service or product - the schemes used at the same time (like the Bermuda-Irish structure of a legal entity with the sweet name “Irish double Dutch sandwich” ), are expected to annoy the states and the power in them.

“I like to sell Ireland. We have something to offer ”- these words were said in October 2013 by Förgel O'Rourke, the Irishman, the father of one of the country's most famous women politicians, and by the nature of his work he is a tax lawyer who specializes in tax breaches in national legislation.

Now we know what O'Rourke offered to Google in Ireland — double the savings on corporate taxes. The effective rate in Ireland is 12.5% ​​of revenue, versus 28% in the UK. Thus, over the past 10 years, Google has not paid a fantastic amount ($ 3.1 billion) to the country's tax department, which it promised to “reimburse in a reasonable amount”.
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Because in 2013, probably no one received a premium in tax, at that moment when news came to the authorities - for £ 3.8 billion (± 5.4 billion dollars) in revenue, the company paid £ 20 million in taxes in the UK. In Australia, where in 2014 Google donated $ 9.4 million to the tax authority (at a rate of 16%), they also ask: “Why so little?” And “Where is the money?”. In France, the tax authorities make claims to her for up to 1 billion euros - officials are unhappy that the profit from the business in this country is taken into account in Ireland.

Because any lord, having heard such news, instantly drops the snuffbox on the floor and falls into righteous anger, both with respect to Google specifically, also reprinting books for free, and with respect to all such companies, along with the notorious Irish separatists, who exhibit it in similar light

And after all, Google is far from the only one - since 2008, when Ireland carried out reforms in response to an ever-worsening economic crisis in the country, its corporate income rate attracted all the giants, from Apple, Facebook, Blizzard, Amazon and Microsoft to the transnational giants in traditional industries: trade (look at the map below - the first and largest commodity exchange still operates in Amsterdam), energy, transportation and logistics (Ireland is the world's largest hangar), and metallurgy.

The scheme, by the way, is quite simple: an Irish company accumulating profits at a rate of 12.5% minus royalties (additional license fees) in favor of a company from the Netherlands (minus because the state returns a tax deduction for this, since the Dutch company holds part of the intellectual property) constituting the lion’s share of revenue, which is subsequently transferred to another Irish company that does not pay any taxes for transactions within the European Union.

"Total actual revenue per legal entity - corporate tax rate - licensed (in the second case, taken into account in total revenue per legal entity) = 1.5 ^1.5 net profit (double taxation gives one-and-a-half total revenue burden)"

All these companies use Irish jurisdiction to accumulate profits from Europe, the Middle East and Africa - this is a known fact. The fact that the British auditors took so much time for a rigorous calculation is proved only by the fact that “everything is going according to plan”, and the statements by Lord Chancellor George Osborne in Parliament that this is “the first important victory in the struggle that the government is leading to forcing companies to pay fair taxes on businesses in the United Kingdom "looks at least strange after March-April last year announced the introduction of a special" diversified "corporate income tax of companies trying to optimize tax payments in the UK with the help of offshore zones (way, Ireland, from a UK perspective, is). The tax, by the way, is so called: “on Google”.

"It seems that the parties have once again concluded an amicable agreement," the BBC said on air on Saturday. Because for these comfortable 10 years, the company will pay only $ 185 million.

The same thing we have witnessed over the past few years in the United States, where President Barack Obama has publicly expressed his gratitude to companies that "returned the money to their homeland." This is the trend of deoffshorization, over which the O'Rourke family is laughing out loud. Mark Zuckerberg at this moment quickly learns from the CFO, whether only the proceeds from the States go to the American account and whether it is only one, while Jeff Bezos is breaking the drone.

The question is who's next in line. Law enforcement on the island works smoothly no matter what, and the general theatrical background rather contributes to concealing the main movement of the play - no one can escape justice, whether it concerns taxes, or something else. Yes, decisions can be slow, yes, in the course of events there is a huge number of questions that require an answer. But the fact that the bill should be paid, the parties converge quickly enough.

In England, Google agreed that these decisions have retroactive effect in the future, and although the amount of tax payments for the company has increased, it will still use the “double Irish” scheme, paying less taxes in Ireland because of the need to pay royalties registered in Bermuda. That is, as in that joke: "it is easier to give you a hundred, than to shoot down a hand," and $ 18 million a year looks disproportionate against the background of a $ 5 billion box office. But, the lords, either they are tired of fighting, or they understand that they are not going to bust - it will come down and it’s good that they have agreed on the future.

The Irish government says it intends to eradicate such schemes in the future. In the meantime, drink at our expense (to which half the world vacuums profits).