Ireland has brought the world many things: James Joyce, whiskey, the image of a freckled redhead standing on a grassy cliff side with a faraway look in her eyes, and now a tax law that tech companies and other multinationals are exploiting to legally avoid paying roughly $60 billion in taxes to the U.S., just as it’s trying to close a projected $1.4 trillion budget gap. Over the past three years, reports Bloomberg, Google has managed to sidestep paying $3.1 billion, getting its tax rate to a shocking 2.4 percent, the lowest of the top five American tech companies. Corporate income-tax rate in the U.S. is 35 percent. Like Facebook and Microsoft, Google uses the tax law that lets companies move profits into and out of subsidiaries in Ireland, leveraging strategies known to lawyers as the “Double Irish” (because it relies on two Irish companies) and the “Dutch Sandwich” (because profits make a stopover in the Netherlands between Ireland and Bermuda or the Cayman Islands). Hey, it’s tax law — they have to sex it up somehow.
Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes [Bloomberg]