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by gaius
4526 days ago
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Google is here in the UK, but why? Well there is the educated workforce to hire, there is a stable business environment, there is infrastructure that works most of the time etc. Now they could go and set up somewhere there really is no tax to be paid, Somalia maybe, but how long would those "global business geniuses" last there? Not long. What would happen to a Google Bus in downtown Mogadishu? Google and companies like it can only exist in the benign environment created by strong-ish national governments. Pretending otherwise is just foolish. |
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This is pretty much what they do, with legal entities in different jurisdictions. Then they can move money around such that the 'profit' is always made in a low-tax environment. For example, I always found it amusing that the invoices for my Amazon purchases had anything to do with Luxembourg (a country with <600k people), until I learned more about how tax havens work. Especially, about the process of 'capturing the state'.
If anyone would like to read more about Tax Havens (aka Secrecy Jurisdictions) I thoroughly recommend the book Treasure Islands by Nicholas Shaxson [1]. (Disclosure: that's an affiliate link for my college's library).
[1] http://www.amazon.co.uk/Treasure-Islands-Havens-Stole-World/...