Google's income tax expense was $5.71 billion in the most recent quarter, compared to the previous quarter's expense of $3.1 billion1. The significant increase in income tax expense can be attributed to several factors:
- Geographical Expansion and Revenue Shift: Google's revenue mix is shifting, with Google Search growing at double-digit levels while network revenues, which have a higher tax rate, declining2. This shift contributes to the increase in income tax expense.
- Business Segment Performance: The company's Other Bets segment, which includes healthcare-related services and internet services, may be contributing to the tax expense increase. This segment's performance and the tax implications of its activities could be driving the rise in income tax expense3.
- Legal and Regulatory Changes: Recent legal and regulatory changes, including the introduction of diverted profits taxes in various jurisdictions to prevent tax avoidance, may be impacting Google's tax expense. These changes could result in higher tax liabilities for the company4.
In summary, the increase in Google's income tax expense is likely a result of a combination of factors including revenue mix shift, business segment performance and legal and regulatory changes.