Bermuda. Image: © kwphotog/Stock.adobe.com
Google moved billions of euro through a Dutch shell company, according to documents filed in the Netherlands.
Documents obtained through a filing at the Dutch Chamber of Commerce show that tech giant Google moved €19.9bn through a Dutch shell company to tax haven Bermuda in 2017, as part of an arrangement that saw its foreign tax bill significantly reduced.
Google responds
According to Reuters, the amount funnelled through shell company Google Netherlands Holdings BV was approximately €4bn more than 2016. In a statement, the company said: “We pay all of the taxes due and comply with the tax laws in every country we operate in around the world.
“Google, like other multinational companies, pays the vast majority of its corporate income tax in its home country, and we have paid a global effective tax rate of 26pc over the last 10 years.”
This arrangement, dubbed the ‘Double Irish, Dutch Sandwich’ has allowed parent company Alphabet to benefit from an effective tax rate in the single digits on its non-US profits. The Dutch subsidiary is used to move royalties revenue earned from territories outside the US to Google Ireland Holdings, a Bermuda-based affiliate. Many major firms take advantage of these tax loopholes to move overseas profits away from countries with higher taxes and avoid others.
An end to the ‘Double Irish’ is in sight
This tax strategy is in fact legal, and allows Google to dodge triggering income taxes from the US or EU, withholding taxes on the revenue. Ireland, where Google’s EMEA headquarters is located, chose to phase out the arrangement in 2014, with the tax advantages due to end completely in 2020.
In 2014, former Finance Minister Michael Noonan announced the end of the controversial ‘Double Irish’ tax scheme in his October Budget speech. The scheme had come under scrutiny from European and US officials. In the US, congressman Sandy Levin was outspoken about the need for such loopholes to be closed.
