Apr 19, 2021 11:59:00

It turns out that Google was making a profit of 8 trillion yen or more with tax havens

Large companies such as Google and Apple

avoid paying taxes by setting up affiliates in areas called tax havens , which have low tax rates. However, there are cases where large companies avoid paying taxes, which is disadvantageous to the country, and there are cases where the country filed proceedings against the companies. Meanwhile, in 2019, it became clear that Google had earned more than 8 trillion yen in sales in Ireland, which is used for tax avoidance.

Google used'double-Irish' to shift $ 75.4bn in profits out of Ireland
https://www.irishtimes.com/business/technology/google-used-double-irish-to-shift-75-4bn-in-profits-out-of-ireland-1.4540519

Ireland has a law that 'does not impose corporate tax on companies controlled from abroad'. Therefore, the company has established two companies in Ireland, a 'subsidiary that serves as an overseas business base (company A)' and a 'subsidiary that only grants licenses (company B)', and licenses the head office through company B to company A. By managing Company B from a 'paper company established in a tax haven outside Ireland', you can avoid paying a large amount of tax. This tax-saving method is called 'double Irish' and has been used by large companies such as Google, Apple, and Facebook.

'Paradise Papers' reveals how Apple stores assets in tax havens-GIGAZINE

By

Jakob Esben H.

However, due to the revision of the Irish law in 2015, the use of Double Irish will be banned from 2020, and Google and Facebook are reducing tax avoidance using Ireland .

Meanwhile, Google's earnings report revealed that Google had made a profit of 63 billion euros (about 8.184 trillion yen) in Ireland in the last year of using Double Irish. In addition, Google's overseas business base 'Google Ireland' with 4000 employees earned 45.7 billion euros (about 5.93 trillion yen), but only 263 million euros (about 34.1 billion yen) It is also known that he did not pay taxes.

A Google spokeswoman said, 'In December 2019, Google changed its Irish subsidiary to be managed from the United States in response to the revision of the law in the United States and Ireland. It's from 2019. '' Google's effective tax rate has exceeded 20% in the last 10 years, 80% of which has been paid to the United States, 'said Google's reduction in tax avoidance and the United States. It emphasizes that it pays a large amount of tax to.

In the United States as well, tax avoidance methods such as the corporate income tax saving method 'Delaware loophole' that uses the laws of the state of Delaware are widely used, and each country's response to tax avoidance by companies is drawing attention.

Why do well-known companies such as Apple and Google choose 'Delaware'? --GIGAZINE