Google shifted $9.8 billion in revenue to its Bermuda shell company last year, in a move that allowed it to cut its overall tax rate almost in half, Bloomberg reports based on company filings. The figure is nearly double what Google funneled overseas three years earlier, and represents roughly 80% of the company's pretax profits. While the trick is entirely legal, it's likely to fuel the debate in the US and Europe over corporate tax dodgers.
"The tax strategy of Google and other multinationals is a deep embarrassment to governments," says one UK tax accountant. "The political awareness now being created in the UK, and to a lesser degree elsewhere in Europe, is: It’s us or them. People understand that if Google doesn’t pay, somebody else has to pay or services get cut." Google defends the practice as legal, and points out that its investments benefit many of the countries in which it's avoiding taxes; in the UK, for instance, it employs 2,000 people. (Read more Google stories.)