Google has agreed to pay 130 million pounds (or about $185 million) in a tax settlement to U.K. authorities, where the British Labour Party criticizes the government’s handling of the case and the normal use of corporate tax strategy workarounds.
1. How far back in time does the settlement go to cover back taxes?
2. What are the two shelter strategies that Google has used to avoid billion of dollars in taxes around the world?
3. What is the name of Google’s parent company?
4. Make the journal entry that Google would record for this settlement, assuming that it will be paid sometime in the near future.
Womack, B. (2016). Google Agrees to Pay $185 million in U.K. Tax Settlement. Accounting Today, Jan. 25 (Retrievable online at http://www.accountingtoday.com/news/tax-practice/google-agrees-to-pay-185-million-in-uk-tax-settlement-77030-1.html)