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Irish arm of Google pays Dutch €8.6bn to cut taxes

GOOGLE's Irish arm paid a whopping €8.6bn in royalties to a Dutch subsidiary last year as the internet giant continues to legally exploit international tax structures to reduce its tax bill.

Its international sales are recorded by the Google arm in Ireland, but it funnels a huge chunk of the money out to the Dutch company, which is in turn shifted to Bermuda. The practice is nicknamed the 'Dutch Sandwich'.

By using a Bermuda base, Google manages to cut its effective tax rate to just 5pc. That compares to the 12.5pc corporate tax rate in Ireland.

Google Ireland paid just €17m in corporation tax in Ireland last year, despite its revenue ballooning to €15.5bn.

And it recorded a pre-tax profit of just €137m in Ireland during 2012.

The amount of royalties paid to the Dutch subsidiary last year totalled €8.8bn and includes €233m from one of its units in Singapore, the 'Financial Times' reported.

The total figure is about 25pc more than had been paid to the Dutch unit in 2011.

Virtually all the €8.8bn received by the Dutch subsidiary was then paid back to a different Google company that's based in Ireland – but controlled from Bermuda.

The highly controversial practice has attracted criticism from US politicians.

Google is one of Ireland's biggest employers, with over 2,200 workers.

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