Google cuts tax with 'Double Irish' scheme
Alphabet Inc.'s Google moved €15.9bn to a Bermuda shell company in 2016, saving at least $3.7bn in taxes that year, regulatory filings in the Netherlands show.
Google uses two structures, known as a 'Double Irish' and a 'Dutch Sandwich', to shield the majority of its international profits from taxation. The setup involves shifting revenue from one Irish subsidiary to a Dutch company with no employees, and then on to a Bermuda mailbox owned by another Ireland-registered company.
The amount of money Google moved through this structure in 2016 was 7pc higher than the year before, according to company filings with the Dutch Chamber of Commerce.
"We pay all of the taxes due and comply with the tax laws in every country we operate in around the world," a Google spokesman said in a statement. "We remain committed to helping grow the online ecosystem."
Google is under pressure from regulators and authorities around the world for not paying enough tax.
The Government here closed the tax loophole that permitted 'Double Irish' tax arrangements in 2015 but companies already using the structure are allowed to continue employing it until the end of 2020.
According to US financial filings, Google's global effective tax rate in 2016 was 19.3pc, which it achieved in part by shifting the majority of its international profit to the Bermuda-based entity. Total foreign earnings Google held overseas were $60.7bn at the end of 2016, the SEC filing said. US tax changes mean Google and other multinationals have an incentive to repatriate much of that cash at a one-time 15.5pc tax rate. (Bloomberg)