Many high-profit businesses founded in the United States, Canada and beyond are making the decision to go offshore, registering their corporations in nations such as the Netherlands and Ireland. Unfortunately, many cry foul when they learn of a company’s offshore activities. They hurl accusations by alleging a lack of patriotism, among other things.
But companies such as Google, Facebook, Microsoft and Banners Broker are going offshore for good reason: these high-profit companies are enjoying much lower tax rates. For many businesses, this means more profits for investors, higher pay for employees and significant savings for consumers. There’s little that’s unpatriotic about this!
The savings can be very significant. For instance, Google sends its foreign income through Ireland and the Netherlands to Bermuda in a strategy that’s termed the “Double Irish.” And according to official tax filing documents, Google has managed to reduce its overseas tax rate to 2.4% — nearly ten times lower than the average corporate rate of more than 20%.
Notably, the corporate tax rate in the U.S. is significantly higher than the international average of 20%; the U.S. Corporate tax rate is a whopping 35%. That said, it’s easy to see why high-profit companies would opt to utilize this strategy.
Some may ask, “Is it legal?” The answer is “yes, absolutely.” The strategy involves taking advantage of very real and very legal loopholes. In the case of Google, a majority of the company’s revenue comes from its advertising programs, like AdSense and AdWords. Advertisers place PPC and contextual advertisements via the AdWords program and publishers display the adverts on their websites via the AdSense program. This enables affiliates to monetize their sites and earn a profit.
Advertising programs have a high profit margin, ranging from 30% to an incredible 90%.
Similarly, Banners Broker has established an affiliate program that’s quite similar to Google’s tremendously successful program. And like Google, Banners Broker enjoys a high profit margin on advertising, which enables for high payouts to its members.
And like Google, Banners Broker has opted to maintain an offshore corporation registration for tax purposes because as a high-profit company, it stands to take a significant tax hit — funds that could otherwise be reinvested into the company and used to reimburse affiliates.
For many high-profit companies, going offshore simply makes sense, not just for the companies, but also for the affiliates, investors, employees and consumers. In short, going offshore enables high-profit businesses to support the economy in a slightly different way.
What doesn’t go towards paying taxes goes into the economy via a slightly different but equally beneficial method — by providing jobs for employees, revenue for investors and affiliates, along with discounts to consumers.
Michael Finch is the author of a popular internet marketing blog. To find out more about Banners Broker, visit the BannersBroker Blog . To find out more about Google, check out the Official Google Blog
For more information, visit http://bannersbroker.blogspot.com/