According to new regulatory filings, Google avoided paying $3.1 billion in taxes over the last three years through complex financial tactics known as the “Double Irish” and “Dutch Sandwich”
Bloomberg reports that Google’s overseas tax rate is 2.4%, lower than what competitors like Apple and Microsoft paid. In fact it was the lowest of the top five tech companies by market cap.
The low tax rate is jaw droopingly impressive when you compare it to the 35% corporate rate in the United States. “It’s remarkable that Google’s effective rate is that low,” Martin A. Sullivan, a tax economist who formerly worked for the U.S. Treasury Department, told Bloomberg. “We know this company operates throughout the world mostly in high-tax countries where the average corporate rate is well over 20 percent.”
No one has accused Google of illegal activity. Its tax strategy is employed by many large US corporations. Academics estimate that all told it costs the government as much as $60 billion a year. Google is “flying a banner of doing no evil, and then they’re perpetrating evil under our noses,” Abraham J. Briloff, a professor emeritus of accounting at Baruch College, told Bloomberg.
“Who is it that paid for the underlying concept on which they built these billions of dollars of revenues?” Briloff said. “It was paid for by the United States citizenry.”