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Google Gets Low U.K. Tax Bill Because of Location, Location, Location

In real estate, everyone knows that location is the key to value. The same would appear to be true about tax law. In the U.K., apparently it can pay handsomely to choose your headquarters situation with care. According to the Daily Mail, Google has milked that with a vengeance. By funneling British advertising revenue through its European headquarters in London, the company avoided £450million (over $720 million) in tax on £1.6billion ($2.56 billion) it made. Other income resulted in taxes of £141,519 (about $226,579). That's the equivalent of someone making $100,000 and paying about $8.85. Nope, the decimal is not misplaced. Here's what Google had to say:

Spokesman Peter Barron said: "Google makes a big investment in the UK, with more than 800 employees, and we make a substantial contribution to local and national taxation. But the fact is that our European headquarters is in Dublin. We comply fully with the tax laws in all the countries in which we operate. It would be wrong to think of Google's revenues from UK advertisers as solely the result of operations carried out locally."
And here's my Brit to American translation of that explanation:
We hired a bunch of people who pay taxes, so what's your problem? At least somebody is paying something. We're following your laws, so blame yourself for leaving the loopholes. And our advertising revenue comes from places other than the U.K., so just because we have our offices here and we get all the money we make, don't be haters of the other countries who are getting even less from us than you are.
Image via stock.xchng user ctoocheck, site standard license.
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