Google pays €27m corporation tax on €17bn revenue
Published 25/07/2014 | 02:30
INTERNET giant Google paid just €27.7m in corporation tax in Ireland last year, despite revenue at its Irish unit jumping by €1.5bn to €17bn.
The company, which employs nearly 2,400 people in Ireland, said the amount of corporation tax paid was up from the €17m it paid in 2012.
But the increase is unlikely to quell concerns in the US or Europe, where American multinationals have been accused of using convoluted corporate structures in order to avoid swingeing tax bills.
In March, French authorities slapped Google with a €1bn tax assessment which comprised back taxes and penalties stretching back 10 years.
Google, which has its European HQ in Dublin, manages to pay so little corporation tax in Ireland because it reduces its taxable turnover here by re-routing much of the revenue through foreign subsidiaries.
Last year, Google's Irish unit reported "administrative expenses" of €11.9bn compared with €11bn in 2012. Much of those expenses consist of royalties that are paid to an offshore unit.
Coupled with the €5.1bn costs of sales that it deducts from its revenue, that reduced its taxable profits here to just €188.5m last year.
John Herlihy, who heads up Google's Irish arm, said last year had seen continued growth of the company's business across Europe, the Middle East and Africa. "Dublin is playing a direct role in helping companies gain from the digital opportunity," he said.
The company has invested heavily in Ireland since setting up in the capital over 10 years ago.
Earlier this year, it paid €65.1m to buy a new office building adjacent to its existing premises on Dublin's Barrow Street. The building was sold by NAMA.
"This acquisition strengthens our operations in Dublin and future-proofs any space requirements we may have in Dublin's Docklands," said Mr Herlihy.
Prior to that, it had paid a total of €227m to buy the three buildings that comprise its existing Dublin HQ. Last month, it completed the construction of its 'Sky link' – a footbridge that connects those three buildings together.
In February, it also opened a wellness centre for its staff in one of its refurbished Dublin offices.
Earlier this year, Google said that it may spend as much as €150m on a new data centre in Dublin. It opened its first company-owned data centre in Ireland in 2013 at a cost of €75m.
It also spent €35.4m on research and development last year, virtually the same amount it spent in 2012.