Shell Game
Microsoft gets about 75 percent of its 40 billion dollars in revenue from licensing fees. A few years ago, it set up an Irish subsidiary called Round Island One Ltd. to own its 16 billion dollars worth of copyrights on software developed in the U.S. In 2004, it shifted nine billion dollars in profits to Ireland and thereby avoided paying some 500 million dollars in U.S. taxes. Using the Irish company, Microsoft also avoids taxes elsewhere in Europe, the Middle East and Africa. The maneuver helped Microsoft drop its worldwide tax rate from 33 percent to 26 percent.Google similarly set up an Irish subsidiary, Google Ireland Holdings Ltd, which in 2004, its first year, helped the company avoid paying about 131 million dollars in U.S. taxes. Google noted in its annual report that year that it expected its effective tax rate to drop even more significantly. It explained, “This is primarily because proportionately more of earnings in 2005 compared to 2004 are expected to be recognised by our Irish subsidiary, and such earnings are taxed at a lower statutory tax rate (12.5 percent) than in the U.S. (35 percent).”
Shure, its great craic here bhoy….
what would we know about dem tings taxes…