I agree with your thoughts and I will definitely take that into consideration in the future, the post was meant to simply the concept of how they tax plan their business and how difficult it is to enact such a plan.
To clarify, Google's foreign tax rate is 2.4% and their US tax rate is 21.2%. But, I believe it is important to delve further than the surface of these numbers. The 2010 fiscal year has been the most profitable year yet for Google and $17.5B is more than 7x the net income presented on their current financial statements. Also, they've refused to disclose the amount of income that is transferred to their offshore activities through their APA.
But, note that their income from foreign sources is equated to 52% of their overall revenues of approximately $30B. This would suggest that at a minimum their foreign sourced income held overseas is at least more than 50%. The APA is designed to help the company shift the tax incidence to different tax regimes, thus it would be more than likely that the true number is much higher. But, it would be impossible to determine without access to a number of documents beginning with the agreement (which lasts for 5 years before they must renegotiate for a new plan).
We could make this much more complicated, but I wanted to focus on the tax plan since most people were interested in that aspect.
To clarify, Google's foreign tax rate is 2.4% and their US tax rate is 21.2%. But, I believe it is important to delve further than the surface of these numbers. The 2010 fiscal year has been the most profitable year yet for Google and $17.5B is more than 7x the net income presented on their current financial statements. Also, they've refused to disclose the amount of income that is transferred to their offshore activities through their APA.
But, note that their income from foreign sources is equated to 52% of their overall revenues of approximately $30B. This would suggest that at a minimum their foreign sourced income held overseas is at least more than 50%. The APA is designed to help the company shift the tax incidence to different tax regimes, thus it would be more than likely that the true number is much higher. But, it would be impossible to determine without access to a number of documents beginning with the agreement (which lasts for 5 years before they must renegotiate for a new plan).
We could make this much more complicated, but I wanted to focus on the tax plan since most people were interested in that aspect.