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Mini-Case - Google, Taxes, and Do No Evil Google's offshore tax strategy is the Double-Irish-Dutch Sandwich, which is based on the repositioning of ownership of

Mini-Case - Google, Taxes, and Do No Evil

Google's offshore tax strategy is the Double-Irish-Dutch Sandwich, which is based on the repositioning of ownership of many of its patents, copyrights, and other intellectual property to a subsidiary in a low-tax environment like Ireland.

The Inland Revenue Service in the UK has been frustrated by the magnitude of sales generated by Google resulting in such a low tax liability. Google is also set up as a Permanent Establishment (PE), whose rules allow firms such as Google to fix a tax base in a low-tax country like Ireland, while generating lots of business in a country where the tax rates are higher, like France.

Companies in principle are taxed not on where they do business but on where they finalize their business deals with customers - the country or jurisdiction where the final contract is signed. In the case of Google, that means most sales throughout the EU are finalized in Ireland.

My question:

What are some possible changes to the tax code that would bring the tax liabilities payable by Google to onshore U.K.?

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