When you buy the latest installment of Call of Duty and you pay your subscription to World of Warcraft, you probably think that your money goes to California, where is based Activision Blizzard, the publisher of these games. Even in France, where is its owner Vivendi.
But it is not. In fact, all profits generated outside of North America go to Bermuda. Indeed, the global leader in video games has implemented an optimization assembly tax in this regard. Result: end of March, $ 2.7 billion of profits sleep in this tax haven in the Caribbean, 60% of the total cash flow of the company, indicate the quarterly accounts.
Advantage: it can not pay virtually no tax. Thus, in 2012, Activision Blizzard paid only $ 38 million of taxes outside the United States, only 4.8% of its profits, indicate the annual accounts.
Result: while international revenue accounts for half of the editor, it represents only 12% of the tax paid, also indicate the financial statements.
Taxed nowhere
To achieve this, Activision Blizzard has created at least seven subsidiaries in Bermuda, and at least as Delaware, internal tax haven in the United States. And until 2011, the publisher still using another tax haven, Luxembourg.
In addition, it also uses the flaws of European taxation. Thus, he created at least six Dutch subsidiaries using a very special status. These subsidiaries are registered in the Netherlands, but from a fiscal point of view, they are resident in Bermuda. This allows them not to pay tax on profits or the Netherlands or Bermuda ... well, anywhere!
Profits only where there is no tax
In the end, this complex assembly follows a simple logic. Where there is no tax, subsidiaries are very profitable. But where a tax is levied, subsidiaries make very little profit-surely a coincidence ...
Thus, all profits outside North America back to a subsidiary called ATVI CV, registered in the Netherlands, but tax resident in Bermuda, and therefore pay zero tax on its fat profits. In 2011, this subsidiary (which has no employees) achieved a pre-tax margin of 46% on a turnover of 660 million euros, according to the accounts.
Profitability deliberately leaded
But before arriving in Bermuda, profits go through another subsidiary, Activision Blizzard Coöperatie AU installed near the Amsterdam airport, which itself performs its taxes in the Netherlands, at the legal rate 25% of profits.
Alas! This subsidiary is very profitable: in 2011, she realized a pre-tax margin of just 1% on a turnover of € 953 million, according to its accounts. Result: the taxes paid to the Dutch tax authorities are ridiculous: € 2.4 million in 2011.
How do we arrive at such poor benefits? It's simple: the benefit is the smallest possible, profitability is deliberately sealed. In particular, Activision Blizzard Coöperatie UA pays on every video game sold very significant royalties on patents used ATVI CV, a subsidiary resident tax in Bermuda. These royalties accounted for 69% of sales in 2011, and even 84% in 2010.
Used here is another flaw of the Dutch tax that does not tax royalties paid outside the Netherlands, unlike in France, for example. This is the same fault that is used by Google in its mounting tax evasion.
Hardly any tax paid in France
The same principle applies in France, where the video game publisher has two subsidiaries: Activision Blizzard Blizzard Entertainment France SAS and SAS. The first hardly pay tax: 64,609 euros in 2011. The second is even better: it pays no tax, but on the contrary that the IRS owes him money (see below cons).
Explanation: These two subsidiaries are, again, very inefficient. In 2011, they made a pre-tax margin of only 4% on a total turnover of 363 million euros. In addition, Activision Blizzard France SAS has made losses in the past, allowing it to reduce its current tax.
If the French subsidiaries were as profitable as the whole group, then they would realize more profit (28% profit before tax in 2011), and therefore pay more tax (EUR 35 million in 2011).
To make matters worse, the behavior of these two subsidiaries does not seem exemplary. Since the merger between Activision and Blizzard, their number was reduced by half (in particular via an ESP 200 positions), falling to 557 employees. Activision Blizzard France SAS accounts also indicate that it has recently undergone tax audits and Ursaaf, which are each translated by adjustments ...
When asked, neither the seat of Activision Blizzard, nor French subsidiary nor Vivendi have answered us.
