Google Invests $1 Billion To Build New London HQ 132
redletterdave writes "Google just purchased a 2.4-acre plot in the King's Cross Central development in London, where the company plans to build a brand-new, 1 million square foot office. Google reportedly invested about £650 million ($1.04 billion) on the property, which, when finished, will be valued at more than £1 billion ($1.6 billion). While Google traditionally leases its overseas offices, the company's decision to buy rather than rent in this case was likely tax motivated, since Google can't repatriate its cash to the U.S. without paying a hefty tax."
Re:A new way to add new building to your city? (Score:5, Informative)
Except it's to avoid US tax they are doing this. Reuters article. [reuters.com]
Re:Can someone explain how multinationals work? (Score:5, Informative)
Most of the talk I've heard about doing something about this centered on convincing tax havens to raise their taxes, but as long as there is one around, doing so is pointless. And as a country, there are advantages to being a tax haven.
As a freelancer, I incorporated a few years ago and was surprised at how easy it is to reduce ones profit on paper, even for a small 1 man firm. And it's easy to set up a company nowadays, a few phone calls and a signature is all it takes; I'm considering setting up a company on Cyprus and sending my revenues there to enjoy an even lower tax rate. One of our royals was discovered doing the same thing, and after some public outcry, Internal Revenue hastened to proclaim that the whole thing was fully legit. So I do not feel bad about dodging taxes, not with IR approval and a royal endorsement.
Re:Can someone explain how multinationals work? (Score:5, Informative)
Bludger: Australian slang for someone who lives off government handouts, and who refuses to work.
Re:Can someone explain how multinationals work? (Score:2, Informative)
OK, let's do this:
Fred Smith works for Foo UK Ltd. He's running their whole Foozle operation on a day-to-day basis, most Foo workers in the UK think of Fred as the "big boss" but he's just an employee like them.
Fred reports to Amy, Bob and Chris who are the Directors of the company. Some of the directors could also be employees, but in this case they're not, regardless they are responsible for the "big picture" of the company. The directors are legally responsible in some senses for the company, for example if a court felt that the company as a whole had done something wrong, and the directors had been aware, or should have been aware and did nothing, the directors could go to jail.
Amy, Bob and Chris report to the shareholders of Foo UK Ltd, as the name suggests the shareholders own some "share" in the company. Shareholders can get rid of directors and find new ones, but they don't have any direct control over the company. If Foo UK was an independent privately owned business these shareholders would be various ordinary (but probably rich) individuals. Most people who work for Foo UK would have no idea who the shareholders were. If Foo UK is a public company, its shareholders could include almost anyone, you can buy shares online for a few dollars right now, but most would probably be held by pension companies and other "hands off" institutional investors. Finally, if Foo UK exists only to make life easier for Foo International Corp, who are based in Australia, then there is only one shareholder, Foo International Corp, and obviously if the directors do anything except what Foo International Corp wants, they'd be dismissed immediately. Also some or all of them would probably be Foo International Corp employees. Amy, Bob and Chris, as directors of Foo UK Ltd might actually all live in Australia and perhaps never even have seen the UK, they could still give orders to Fred maybe over a weekly video conference.
In the specific example you gave, the UK Google has exactly one shareholder, Google Inc in the US. This gives them 100% control, which they exercise by appointing directors who are also Google US employees. The UK staff are just employees, including the head of the UK business.
Re:Can someone explain how multinationals work? (Score:5, Informative)
The unfortunate fact is that tax laws are fucking complex, and contain loopholes smart people can find and exploit.
And why are there loopholes? Look into it, and you'll find that it's basically a massive patchwork of hacks to maintain favourable exemptions for certain industries that are politically important/give politicians a lot of money. The tax system could be massively simplified to eliminate those loopholes, but it's in nobody who counts' interest to do so - companies would pay more tax, politicians wouldn't be able to manipulate the system to scratch the back of companies' "lobbying" them, and individuals, well, since when have they counted anyway?
Re:Can someone explain how multinationals work? (Score:5, Informative)
bugger (noun)
1. Informal. a fellow or lad (used affectionately or abusively): a cute little bugger.
2. Informal. any object or thing.
3. Often Vulgar. a sodomite.
4. Chiefly British Slang.
- a. a despicable or contemptible person, especially a man.
- b. an annoying or troublesome thing, situation, etc.
Re:One trick is through sales (Score:3, Informative)
Actually "Occupy WS" was the media creation ... (Score:4, Informative)
We used to call them "Wall Street Bankers", but then the Tea Party arose and convinced people (perhaps with the aid of a new source of funds) that WS wasn't the real problem.
Actually the Tea Party's roots are in reigning in gov't spending. It was in fact an organic grass roots movement. They went after Bush and the Republican controlled Congress when they were spending like mad. However it eventually became co-opted to a degree by the Republican party.
It was Occupy Wall Street that was a creation:
"The Canadian anarchist group Adbusters initiated the protest with assistance from the Manhattan-based public relations firm Workhorse, who was well-known for its successful work on client brands including Mercedes and Saks Fifth Avenue."
http://en.wikipedia.org/wiki/Occupy_wall_street [wikipedia.org]
And like the Tea Party became co-opted to a degree, though by the Democratic party.