Google avoided about $2 billion in worldwide income taxes in 2011 by shifting $9.8 billion in revenues into a Bermuda shell company, almost double the total from three years before, filings show.
By legally funneling profits from overseas subsidiaries into Bermuda, which doesn’t have a corporate income tax, Google cut its overall tax rate almost in half. The amount moved to Bermuda is equivalent to about 80 percent of Google’s total pretax profit in 2011.
The increase in Google’s revenues routed to Bermuda, disclosed in a Nov. 21 filing by a subsidiary in the Netherlands, could fuel the outrage spreading across Europe and in the United States over corporate tax dodging. Governments in France, Britain, Italy and Australia are probing Google’s tax avoidance as they seek to boost revenue.
FTC investigating cellphone app makers
The government is investigating whether software companies that make cellphone apps have violated the privacy rights of children by quietly collecting personal information from phones and sharing it with advertisers and data brokers, the Federal Trade Commission said Monday. Such apps can capture a child’s physical location, phone numbers of their friends and more.
The FTC described the marketplace for mobile applications – dominated by online stores operated by Apple and Google – as a digital danger zone with inadequate oversight. The FTC did not say which or how many companies it was investigating.
Fannie, Freddie execs’ median pay: $200,000
A government report finds median pay for nearly 2,000 senior managers at government-controlled Fannie Mae and Freddie Mac exceeded $200,000 last year.
The Federal Housing Finance Agency, which oversees the mortgage giants, also did an inadequate job monitoring pay, a report released Monday from the inspector general for the FHFA said.
Those managers represent nearly 17 percent of the roughly 11,900 total employees at the two bailed-out companies. Taxpayers so far have paid roughly $170 billion to rescue Fannie and Freddie.
Verizon moves pension obligations
Phone company Verizon Communications Inc. on Monday said it has transferred $7.5 billion in pension obligations to Prudential Insurance after a retiree association failed to persuade a court to stop the move.
Members of the Association of BellTel Retirees sued in federal court in Dallas two weeks ago to stop the deal, saying it would weaken the legal protections for retirees. It effectively turns the company’s defined-benefit pensions into annuities to be paid by Prudential. Annuities aren’t covered by the federal Pension Benefit Guaranty Corp.
Ingersoll-Rand to spin off unit
Industrial conglomerate Ingersoll-Rand says it will spin off its security technology business and buy back $2 billion of shares.
The Ireland-based company also said Monday it is raising its quarterly dividend by 31 percent to 21 cents per share. The manufacturer, which makes heating and cooling systems, said the spinoff of its commercial and residential security businesses into a new public company will be completed within the next year.