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January 3, 2018

how google evaded $19 billion in taxes

Alphabet Inc's Google moved $19.2 billion to a Bermuda shell company in 2016, regulatory filings in the Netherlands show -- saving the company billions of dollars in taxes that year. Tech companies like Google Apple and Microsoft have for a long time balked at the 35% corporate tax the current tax code requires them to pay on worldwide profits returned to the U.S and often used complex financial methods to circumvent and avoid paying taxes, Most technology companies have parked as much of their profit as possible in overseas subsidiaries in countries like Bermuda and Ireland, where tax rates are low. Google used two structures, known as a "Double Irish" and a "Dutch Sandwich," to shield the majority of its international profits from taxation

The setup involves shifting revenue from one Irish subsidiary to a Dutch company with no employees, and then on to a Bermuda mailbox owned by another Ireland registered company.The amount of money Google moved through this tax structure in 2016 was 7 percent higher than the year before, according to company filings with the Dutch Chamber of Commerce dated Dec. 22 and which were made available online Tuesday. News of the filings was first reported by the Dutch newspaper Het Financieele Dagblad.

Zion Research Group estimates that U.S. companies in general have $2.8 trillion in profits parked in overseas affiliates.Meanwhile the big tech companies have increased their lobbying efforts on tax policy. The Big 5 tech companies increased their lobbying spending in the third quarter of 2017 (the last reporting period) by a collective 24.3% compared to the same quarter in 2016. Microsoft alone had 81 lobbyists from 16 different firms (and Amazon had 64 lobbyists) working for them to influence Congress specifically on tax issues in the first three quarters of 2017, according to Public Citizennbsp;

According to Wired US companies overall are stashing $1.17 trillion offshore and about half of that ($462 billion) is tech company dough. If they paid 30 percent on those earnings, same as you do, they’d be able to completely fund California K-12 public schools for almost two years.The Big 5 tech companies–Apple, Alphabet, Amazon, Facebook, and Microsoft–currently have a combined $457 billion held in overseas subsidiaries. Apple holds more profits overseas than any other company, with Microsoft closely following.