Home > Technology > Google shifted €19.9bn to tax haven Bermuda in 2017

Google shifted €19.9bn to tax haven Bermuda in 2017

Written by Business World, on 4th Jan 2019. Posted in Technology

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Google moved 19.9 billion euros ($22.7 billion) through a Dutch shell company to Bermuda in 2017, as part of an arrangement that allows it to reduce its foreign tax bill, according to documents filed at the Dutch Chamber of Commerce.

The amount channeled through Google Netherlands Holdings BV was around 4 billion euros more than in 2016, the documents, filed on Dec. 21, showed.

"We pay all of the taxes due and comply with the tax laws in every country we operate in around the world," Google said in a statement.

"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 26 percent over the last ten years."

For more than a decade the arrangement has allowed Google owner Alphabet to enjoy an effective tax rate in the single digits on its non-U.S. profits, around a quarter the average tax rate in its overseas markets.

The subsidiary in the Netherlands is used to shift revenue from royalties earned outside the United States to Google Ireland Holdings, an affiliate based in Bermuda, where companies pay no income tax.

The tax strategy, known as the "Double Irish, Dutch Sandwich," is legal and allows Google to avoid triggering U.S. income taxes or European withholding taxes on the funds, which represent the bulk of its overseas profits.

However, under pressure from the European Union and the United States, Ireland in 2014 decided to phase out the arrangement, endingGoogle's tax advantages in 2020.

Google Netherlands Holdings BV paid 3.4 million euros in taxes in the Netherlands in 2017, the documents showed, on a gross profit of 13.6 million euros. (Reuters)

Source: www.businessworld.ie

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