cayman islands

Google Double Dutch

Sounds like a sex act, doesn't it? In a way, it is. Business Week has a HOWTO on not paying U.S. corporate taxes, courtesy of Google. shell game

Next time you hear about how we need to lower taxes to make America more competitive, think of this story. International tax law must be a lucrative career. Grand Puppeteer of global money flows, all to play nation states and their corresponding corporate tax codes against each other. The game is to not pay taxes anywhere.

To reduce its overseas tax bill, Google uses a complicated legal structure that has saved it $3.1 billion since 2007 and boosted last year's overall earnings by 26 percent. While many multinationals use similar structures, Google has managed to lower its overseas tax rate more than its peers in the technology sector. Its rate since 2007 has been 2.4 percent.

All perfectly legal, Business Week explains how Google profits end up in Bermuda, and shows how multinational corporations pit national tax codes against each other.

May the Cayman Islands be so overloaded with rats it sinks

It's not enough to run a financial institution into the ground, but when a nation tries to limit executive pay, bankers scurry like rats to the Cayman Islands:

A group of 45 bankers at Barclays yesterday bypassed potential curbs on pay and bonuses by jumping ship to set up a Cayman Islands company and manage $12.3 billion of Barclays’ most toxic debt. They will be paid at least $400 million over ten years (see Commentary, facing page).

In an exotic piece of financial engineering, the bank will lend $12.6 billion to Protium, a newly created Cayman Islands-registered hedge fund, to buy the toxic assets.