First up, Bloomberg:
Google Inc. (GOOG) received questions from the U.S. Securities and Exchange Commission in December about earnings in other countries that may have reduced the company’s tax bill, according to regulatory filings released today.And from General Electric:
SEC officials asked Google for “disclosures to explain in greater detail the impact on your effective income tax rates and obligations of having proportionally higher earnings in countries where you have lower statutory tax rates,” according to a Dec. 2 letter.
The company responded to the requests for information, the filings show. The SEC said in a Feb. 3 letter that it had completed its review of Google’s filings, and has “no further comments at this time on the specific issues raised.”
Google, owner of the world’s most-popular search engine, has used a strategy that has gained favor among some U.S. companies to reduce taxes. Google cut its income taxes by $3.1 billion over three years by shifting the bulk of foreign profits to Ireland, then the Netherlands and eventually to no-tax Bermuda, according to regulatory filings in the U.S. and abroad....MORE
Setting the Record Straight – GE and TaxesGE and 2010 tax rate:
Recently, some news stories have questioned why GE’s consolidated tax rate in the last few years has been lower than historical levels and lower than the U.S. statutory rate. These stories have grossly simplified the facts concerning GE’s recent tax rates. Here are the facts:See what I'm sayin'? Those news stories were mean spirited.
Here are some other facts about GE’s taxes:
- In recent years, the GE consolidated tax rate was lower than our historic levels due to sizable GE Capital losses during the global financial crisis. These losses, which were primarily in the United States, reduced overall GE income. (If you exclude GE Capital, GE’s tax rate has been about 21% from 2006-2010.) GE’s consolidated (or overall) effective tax rate prior to the financial crisis was in the teens to more than 20%.
- In addition, GE’s global growth has increased, as reflected in the percentage of our global revenue and income — and this results in lower taxes from operations in countries with lower tax rates than in the U.S. While GE has been, and continues to be, one of America’s leading exporters, competing globally often requires a local presence and, in many cases, local business partners.
- In 2010, the tax rate for GE’s Industrial businesses (which includes Energy, Oil & Gas, Healthcare, Aviation and Transportation) was 17%. This was lower than historical levels due to one-time items, including settlements of issues raised in routine tax audits that reduced our rate by almost 5 points. Excluding the benefit from audit resolutions for previously booked taxes, and restructuring and environmental charges, GE’s Industrial tax rate would have been about 23%.
- In 2011, we expect a higher tax rate as GE Capital continues to recover because the one-time factors that reduced 2010 are not expected to repeat, and because the NBCU gain will be at a high tax rate.
- GE paid almost $2.7 billion in cash taxes in 2010 on a consolidated basis (almost 19% of pretax income from continuing operations). Over the past 10 years, GE has paid almost $23 billion of corporate income taxes to governments around the world, making it one of the highest payers of corporate income taxes.
- In addition to corporate income taxes, GE pays many other taxes including payroll taxes on the wages of our employees, property taxes, sales and use and value added taxes. These so-called “indirect” taxes are accounted for as part of GE’s operating expenses but are a significant source of funding for U.S. federal, state and local and foreign governments.
- GE competes against strong global companies, many of which are headquartered outside the U.S. It is essential that the U.S. tax system remains competitive, including on financial services. Reducing the rate of income tax on global operations helps GE stay competitive in non U.S. markets and global success, in turn, increases U.S. exports and jobs....MORE
GE pays indirect taxes. And although they are a write off for federal tax purposes, GE pays them. And GE competes against strong global companies.
And It's just mean to pick on GE.
Here's one of my favorite GE stories:
...The PR flack was quoted as saying:Kurt Vonnegut was a P.R. flack for GE.
“It’s a good demonstration project for the technology,” O’Toole said.Asked why a large, profitable corporation like GE would need financial help from the state, O’Toole said one reason “is to show you have to invest in new technologies. Companies cannot do it alone.”HartfordBusiness.com
In other GE news, spokesmen did comment on whether PR spin could be harnessed as an inexhaustible and eternal source of power....
And so it goes