Thursday, 22 December 2016 10:06

Google avoided US$3.6b in taxes in 2015: report Featured

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Google avoided paying US$3.6 billion in taxes globally in 2015 by shifting US$15.5 billion (€14.9 billion) to a company in Bermuda that is just a shell, according to regulatory filings made in the Netherlands.

The tax avoidance was reported by the Dutch newspaper Het Financieele Dagblad, according to Bloomberg.

Google shifted the money through its Dutch subsidiary, Google Netherlands Holdings, and then on to the empty Bermuda outfit. It was 40% more than the amount that was shifted in 2014, Bloomberg said, citing filings that the search engine behemoth had made with the Dutch Chamber of Commerce on 12 December and which were published online.

Google's parent company, Alphabet, moved most of its non-US profits through the Dutch unit which has no employees, the report said, citing filings with the US Securities and Exchange Commission. This enabled it to pay tax at the rate of 6.4% outside the US, using what is called a "Double Irish" and a "Dutch sandwich."

According to Bloomberg, about €12 billion of the money routed through the Dutch subsidiary came from Google Ireland Limited, which collects most of Google’s international advertising revenues.

The remainder was from Google's Singapore subsidiary. The report said the Dutch company then moved the money to Google Ireland Holdings Unlimited, which owns licensing rights to Google's IP outside the US.

The last named firm is in Bermuda, where no corporate income tax is charged. The use of the two Irish entities is why it is called "Double Irish".

Last year, Google, along with Microsoft and Apple, came under attack during an Australian Senate hearing into tax avoidance.

This year, Google announced that it would restructure its Australian tax affairs to avoid being hit with tougher penalties under Australian federal laws passed at the beginning of the year.

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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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