IT LOOKS like Google may run smack into the European Union’s executive body, the European Commission, which is reportedly looking into blacklisting companies that go to great lengths to avoid paying taxes. That’s exactly what Google has done.
A Bloomberg report lays out the trouble Google is running into across Europe, as countries there look to whether companies like Google are paying their fair share of taxes.
Google Inc. (GOOG) avoided about $2 billion in worldwide income taxes in 2011 by shifting $9.8 billion in revenues into a Bermuda shell company, almost double the total from three years before, filings show.
By legally funneling profits from overseas subsidiaries into Bermuda, which doesn’t have a corporate income tax, Google cut its overall tax rate almost in half. The amount moved to Bermuda is equivalent to about 80 percent of Google’s total pretax profit in 2011.
It’s being widely mentioned with this story that Google’s former CEO Eric Schmidt has been a big supporter of President Obama, both of whom are pictured above.