Google Ireland shields €16bn

Google Ireland shields €16bn

Google moved €15.9bn to a Bermuda shell company in 2016, saving at least $3.7bn (€3bn) in US taxes that year, regulatory filings in the Netherlands show, writes Jeremy Kahn. 

Google uses two structures, ‘the 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 tax structure in 2016 was 7% higher than the year before, according to new company filings with the Dutch Chamber of Commerce.

Google is under pressure from regulators around the world for not paying enough tax.

Last year, the company escaped a €1.12bn 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 EU has been exploring ways to make US tech companies pay more.

The Government here closed the tax loophole that permitted the double Irish tax arrangement in 2015 but companies can use it to the end of 2020. The total pool of foreign earnings Google was holding overseas, free from US taxation, was $60.7bn at the end of 2016.

The US tax law passed last month would give companies an incentive to repatriate much of that cash by offering them a one-time, 15.5% tax rate. Foreign earnings would then be taxed at 10.5%, although companies can deduct foreign tax liabilities.

The law will also impose a 13.1% tax on certain patent royalties that could hit Google’s tax arrangement in which its Bermuda-based subsidiary licenses its intellectual property to its other foreign subsidiaries.

Google Ireland Ltd collects most of the company’s international advertising revenue and then passes this money on to the Dutch subsidiary, Google Netherlands Holdings. A Google subsidiary in Singapore that collects most of the revenue in the Asia-Pacific region does the same.

The Dutch company then transfers this money on to Google Ireland Holdings Unlimited, which has the right to license the search giant’s intellectual property outside the US.

That company is based in Bermuda, which has no corporate tax.


More in this Section

Manager at Cork bank begins action aimed at preventing termination of her employmentManager at Cork bank begins action aimed at preventing termination of her employment

Cork JCD  building to become Ireland's greenest building Cork JCD building to become Ireland's greenest building

British Airways flights delayed by ‘technical issue’British Airways flights delayed by ‘technical issue’

Google bans ads targeting political affiliationGoogle bans ads targeting political affiliation


This truck serves as an excellent metaphor for what needs to happen in our education system. A colossal truck needs to barge in front of it.Secret Diary of an Irish Teacher: Time to ditch private schools

Sorting out Cork people for ages...Ask Audrey: Is it still ok to just lob the gob after 10 pints?

Nip those winter ailments in the bud with the help of garden bounty. Fiann Ó Nualláin shows you how.Have a berry merry Christmas with the help of garden bounty

Dig a planting hole around three times the size of its pot and around the same depth, loosening the soil around the hole.Your quick guide to planting trees

More From The Irish Examiner