The actual laws on the books are more nuanced than posters would like to portray.
Google cannot sell something at 100% licensing fee cost, ie 0% margin.
There is a whole set of rules that govern cross border interco transactions under tax transfer pricing rules.
Google must by law reflect effective market markup in order to stay wothin the law. They cant just say "we are going to pay ireland 95% of sale price" and call it a day.
There is a whole analysis that needs to take place to show that the final applied margin is market.
The moment they dont , googles accountants will not sign off on financials, which starts another meltdown.
Yes, there is some estimate wizardy that goes on, but for the most part companies stay within the law because its very easy to show otherwise.
Benchmarks are transparent.
Most of the upside is abroad because the IP is whats most valuable. Whatever shared-services google performs in the US to spread that IP around, are unsurprisingly low value and yiwld the corresponding taxes.
Google cannot sell something at 100% licensing fee cost, ie 0% margin.
There is a whole set of rules that govern cross border interco transactions under tax transfer pricing rules.
Google must by law reflect effective market markup in order to stay wothin the law. They cant just say "we are going to pay ireland 95% of sale price" and call it a day.
There is a whole analysis that needs to take place to show that the final applied margin is market.
The moment they dont , googles accountants will not sign off on financials, which starts another meltdown.
Yes, there is some estimate wizardy that goes on, but for the most part companies stay within the law because its very easy to show otherwise.
Most of the upside is abroad because the IP is whats most valuable. Whatever shared-services google performs in the US to spread that IP around, are unsurprisingly low value and yiwld the corresponding taxes.