Yahoo shifts Europe tax base to Ireland from Switzerland - Yahoo Finance

Page 1 of 5

Home

Mail

News

Sports

Finance

Weather

Games

Groups

Answers

Sat, Feb 8, 2014, 2:20pm EST - US Markets are closed

Recent

%|$

Quotes you view appear here for quick access.

Quote Lookup Go

Finance Home My Portfolio Market Data Business & Finance Personal Finance Yahoo Originals CNBC

Yahoo shifts Europe tax base to Ire from Switzerland

February 7, 2014 12:36 PM

Compare Brokers

Yahoo CEO Marissa Mayer speaks during her keynote address at the annual Consumer Electronics Sh

By Tom Bergin and Valentina Consiglio

http://finance.yahoo.com/news/yahoo-shifts-europe-tax-ireland-134853678.html;_ylt=A0LE... 2/8/2014

Yahoo shifts Europe tax base to Ireland from Switzerland - Yahoo Finance

Page 2 of 5

Home

Mail

News

Sports ROME Finance Weather Games LONDON/ (Reuters) - Yahoo! Inc is shiftingGroups its main

Answers

European tax base to Ireland from Switzerland, a Reuters examination of company statements and accounts shows, as pressure mounts on the Alpine nation to abolish some corporate tax incentives. The internet search group said the shift reflected a streamlining of its European operations and was not motivated by a desire to cut its tax bill, one of the higher in the U.S. tech sector.

"Yahoo pays all taxes required and complies with tax laws in all countries where we tax obligations seriously," Yahoo spokeswoman Caroline Macleod-Smith said. However, tax experts said it was likely the changes that Switzerland is expected to low Yahoo's lead.

lowing European Union pressure, had some influence over the decision, and that o

"Obviously tax reasons are part of the reasons they are going out of Switzerland," s tax policy at lobby group Economie Suisse.

"The tax regimes we have are very successful (in attracting companies) but there is land abolishes the current regimes ... The risks are substantial," he added.

Currently, Switzerland offers tax rates to companies which make their profits outsid less than half the rates imposed on companies that operate locally.

EU rules require countries not to discriminate between domestic and foreign firms i practice.

has told Switzerland that if it wants to enjoy unfettered access to the bloc's market, i

Switzerland is discussing harmonizing corporate tax rates at a lower level than its c around 21 percent but Marius Brulhart, professor of economics at the University of try may not be able to go as low as Ireland's 12.5 percent rate.

Barry O'Leary, chief executive of IDA Ireland, which is responsible for attracting inw Ireland. "If two or three of them decided to relocate that starts a trend," he said.

land, said he was talking to "a handful" of other companies about possible relocatio

http://finance.yahoo.com/news/yahoo-shifts-europe-tax-ireland-134853678.html;_ylt=A0LE... 2/8/2014

Yahoo shifts Europe tax base to Ireland from Switzerland - Yahoo Finance

Page 3 of 5

Home

Mail

News

Finance Weather Games Groups Answers All Sports companies have a duty to investors not to pay any more tax than they need to b

lations that companies such as Google and Apple use complex structures to shift p it shifting. DUBLIN BOUND

have prompted public anger and spurred the Group of 20 leading economies to lau

In recent months, Yahoo has published statements on its website and emailed cust and conditions for European customers are changing.

Since November companies which advertise on Yahoo! websites have entered cont Ltd, an Irish-registered business.

From late March, private users of premium mail and other services will be doing bu pany.

Previously, customers in France, Germany, Italy and other countries contracted dir subsidiaries and paid fees to them.

The national units passed the revenues directly to a Swiss affiliate, Yahoo! Srl, base

Canton of Vaud, and Yahoo! Srl paid them commissions for securing clients, accoun

The commissions were set at a level which were u j st about enough to cover the nat generated little profit that European authorities could tax.

U.S. internet companies have been especially effective at cutting their overseas tax sales revenues.

nesses in European tax rules means it can be hard for tax authorities there to claim

Between 2009 and 2012, Google had a non-U.S. average income tax rate of 2.9 perc

bill over the period was 3.1 percent, according to a Reuters analysis of company fil

But Yahoo, which has struggled to grow revenues and profit in recent years amid s Google, has one of the higher tax rates in the sector. Between 2009 and 2012, its overseas income tax rate averaged 27 percent.

It's not clear why Yahoo has a higher tax rate but tax advisers say the bigger a com ments. Google and eBay said they comply with all tax rules.

er the opportunities for tax optimization. The company declined to answer question

http://finance.yahoo.com/news/yahoo-shifts-europe-tax-ireland-134853678.html;_ylt=A0LE... 2/8/2014

Yahoo shifts Europe tax base to Ireland from Switzerland - Yahoo Finance

Page 4 of 5

Home

Mail

News

Sports Finance echoes Weather Games by Google, Groups whose Answers Yahoo' s new structure that employed European custome

Google Ireland Limited.

This company sends most of its more than 12 billion euros a year in revenues to an even the headline Irish tax rate.

where there is no corporate income tax. The arrangement allows Google to pay eff

Yahoo, which generates most of its revenue from advertising on its websites, said i changes in its arrangements were intended to "streamline our operations further".

"The structure of our business is driven by business needs and we believe it is in th ers to have Yahoo EMEA provide all services for all users in the region," it added.

Yahoo said it planned to shut its Rolle office by u J ly. Spokespeople in France and Ita

no changes in the mainly sales and marketing functions conducted in those offices. DUBLIN OFFICE

Spokeswoman Macleod-Smith said the current Senior Vice President for Europe, M (EMEA), Dawn Airey, will continue to be based in London.

Yahoo opened a Dublin office in 2003 to provide customer support and technical an did not announce the new financial structure whereby all sales revenues would be lin.

Yahoo units. In March last year, it announced it was hiring 200 new customer and i

O'Leary declined to name the companies he was trying to lure to Ireland but other h

companies whose main European tax base is in Switzerland include travel group E Salesforce.com Inc, CA Inc, Citrix Systems Inc. and Autodesk Inc.

eBay Inc., Videogames publisher Electronic Arts, domain name manager Verisign I

Electronic Arts said it had no plans to shift its international headquarters from Switz panies declined to comments or did not respond to requests for comment. A sales

Salesforce.com's website shows that its Swiss unit continues to be the counterparty

Noble Corp, owner of the world's third-largest offshore drilling rig fleet, announced a were largely made exempt from tax.

to Britain last year, citing Britain's tax regime which had recently been changed so t

http://finance.yahoo.com/news/yahoo-shifts-europe-tax-ireland-134853678.html;_ylt=A0LE... 2/8/2014

Yahoo shifts Europe tax base to Ireland from Switzerland - Yahoo Finance

Page 5 of 5

Home

Mail

News

Sports Griffin, Finance Weather Games Groups Answers Lorraine tax partner at accountants Deloitte in Dublin, said the G20 effort to

avoidance could also help to make Dublin more attractive for companies, even thou been branded a tax haven by U.S. and European politicians.

Documents published by the Organisation for Economic Co-operation and Develop nues where the economic activity which generates the profit takes place. (Refiled to correct name of company in paragraph 13 to Yahoo from Google.)

the G20 tax avoidance drive, have said that in future companies should be forced t

(Additional reporting by Alexei Oreskovic in San Francisco; Editing by Giles Elgood)

View Comments (4)

Share this

http://finance.yahoo.com/news/yahoo-shifts-europe-tax-ireland-134853678.html?soc_src

http://finance.yahoo.com/news/yahoo-shifts-europe-tax-ireland-134853678.html;_ylt=A0LE... 2/8/2014