HAMILTON, Bermuda, Thursday January 4, 2018 – Tech giant Google is said to have moved €15.9 billion (US$19.2 billion) to a Bermuda shell company in 2016, saving billions of dollars in taxes that year.
Quoting regulatory filings in the Netherlands, news agency Bloomberg reported that the amount was seven per cent higher than the year before.
According to Bloomberg, Google’s global effective tax rate in 2016 was 19.3 per cent, which it achieved in part by shifting the majority of its international profit to the Bermuda-based entity. It calculated that applying that tax rate, Google would have saved US$3.7 billion.
The news agency explained that 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,” it said.
However, Bloomberg also quoted a Google spokesman as saying in a statement that the company pays “all of the taxes due and comply with the tax laws in every country we operate in around the world”.
Google is under pressure from regulators and authorities around the world for not paying enough tax. Last year, the company escaped a €1.12 billion (US$1.4 billion) French tax bill after a court ruled its Irish subsidiary, which collects revenue for ads the company sells in France, had no permanent base in the country.
The Irish government 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, Bloomberg reported.