“I am very proud of the structure that we set up. We did it based on the incentives that the governments offered us to operate,” said Eric Schmidt, Google’s Chairman in an interview in New York.
The Silicon Valley boss went on to suggest that Google would not turn down the opportunity to draw on the big savings allowed under the law in the countries it operates in: “It’s called capitalism. We are proudly capitalistic. I’m not confused about this.”
I wonder if Enda Kenny would state that he is also proud of the incentives his governmnet offers Google to avoid almost all of its Irish corporation tax obligations based on the profits that Google earns per year. Because through Irish law we allow Google to claim that Google Ireland Holdings is not actually Irish but is rather a Bermudian company even though it’s registered and uses secretary services of Matsack Trust Limited, 70 Sir John Rogerson’s Quay, Dublin 2.
From the US tax point of view Google Ireland Holdings doesn’t exist, even though it owns Google Ireland Limited which it does recognize. Google Ireland Limited is where, we are told, all the sales from Google Europe (also owned by Google Ireland Holdings, which is turn is owned by Google Bermuda) and wider afield are booked. This could be changed in the morning by simply requiring that a company has to be legally domiciled where its operations are.
Even the Irish accountancy and legal firms offering tax avoidance advice to multinationals like Google are saying that this probably is going to have to happen at some point, even though they say that the official tax rate should come down to 2 or 3% (currently Google only pays 0.14 according to a report in the Sunday Independent and employs 0.06% of the workforce).
Incidentally Matsack Trust Limited is the company secretary for 1,295 companies and is “the in-house company secretary service provided by tier-one legal firm” Matheson Ormsby Prentice.
Matheson Ormsby Prentice’s offices are also the location of Round Island One Ltd, as well as other subsidiaries that Microsoft use to avoid all of it’s Irish, EMEA and US corporate taxes.
So let Enda Kenny stand up and proudly defend the tax avoidance measures that are offered to companies like Google so that they can locate part of their business here, and provide little in the way of tax, and a couple of thousand employees, which of course is a tiny drop in the ocean compared to the hundreds of thousands that have lost their jobs or emigrated. Let’s see him offering the same kinds of support to the sectors where they had been formerly employed. Not a chance.
More on this of course in the Irish Left Review Journal out in January.
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