A few things you should consider about international taxation is that it's complicated and only works because they have the infrastructure to sustain it.
Disclaimer, I'm not saying what they're doing is right or wrong, but simply placing it into context
1. Individuals have a hard time using international tax law similarly because of CFC rules (closely-held foreign corps). If anyone owns more than 10% of a foreign company they must include or report the income as part of their current earnings.
2. The effective tax rate is only "2.something percent" of income the income google earned outside the US.
3. To have an APA (Advanced Pricing Agreement) with the IRS is incredibly expensive and time consuming because it's like getting audited in advance and then justifying it before you ever do anything.
4. You need to pay at a minimum a big 4 accounting firm 10 million to start a project of this complexity over a number of countries.
5. The dutch companies are simply a "conduit" to allow the money to ultimately reach the Caribbean island tax havens because they have no income tax and simply charge a flat tax of 15k.
6. On cperciva's note, this tax plan could be considered "post-poning income recognition" but in reality it effectively is never repatriated or brought back into the country because google is such a multinational company. They could use the money for their international business very easily or they could use their foreign cash reserves to purchase an asset in a foreign country and still retain the ownership by the US main company.
I could go on for a while but this is just a the tip of the iceberg.
I've practice this area of taxation before as a CPA so I could give you a number of other examples.
Yes possibly, if you're able to source the income offshore and keep it away from the united states. Then you'd be able remove it easier. But, as a shareholder that owns more than 10% of the company. It effectively cancels any of the tax benefits.
There are some creative ways to remove yourself from the equation but it's pretty complicated.
http://cameronkeng.com/hn-how-do-i-pull-a-google/
A few things you should consider about international taxation is that it's complicated and only works because they have the infrastructure to sustain it.
Disclaimer, I'm not saying what they're doing is right or wrong, but simply placing it into context
1. Individuals have a hard time using international tax law similarly because of CFC rules (closely-held foreign corps). If anyone owns more than 10% of a foreign company they must include or report the income as part of their current earnings.
2. The effective tax rate is only "2.something percent" of income the income google earned outside the US.
3. To have an APA (Advanced Pricing Agreement) with the IRS is incredibly expensive and time consuming because it's like getting audited in advance and then justifying it before you ever do anything.
4. You need to pay at a minimum a big 4 accounting firm 10 million to start a project of this complexity over a number of countries.
5. The dutch companies are simply a "conduit" to allow the money to ultimately reach the Caribbean island tax havens because they have no income tax and simply charge a flat tax of 15k.
6. On cperciva's note, this tax plan could be considered "post-poning income recognition" but in reality it effectively is never repatriated or brought back into the country because google is such a multinational company. They could use the money for their international business very easily or they could use their foreign cash reserves to purchase an asset in a foreign country and still retain the ownership by the US main company.
I could go on for a while but this is just a the tip of the iceberg.
I've practice this area of taxation before as a CPA so I could give you a number of other examples.