|
Accounts for Google Netherlands Holdings BV published on
Thursday show the unit transferred almost all its revenue,
mainly royalties from an Irish affiliate through which most non-U.S.
revenue is channeled, to a Bermuda-based, Irish-registered
affiliate called Google Ireland Holdings.
The tax strategy is known to accountants as the "double Irish,
Dutch Sandwich'. It allows Google, now part of holding company
Alphabet Inc, to avoid triggering U.S. income taxes or European
withholding taxes on the funds, which represent the bulk of the
group's overseas profits.
A Google spokesman said the company follows the tax rules in all
the countries where it operates.
The decade-old arrangement allowed Alphabet to enjoy an
effective tax rate of just 6 percent on its non-U.S. profits
last year, around a quarter the average tax rate in its overseas
markets.
Bermuda charges companies no income tax.
Corporate tax avoidance has risen to the top of the political
agenda in European in recent years and Google in particular has
been under pressure for the low tax it pays on profits generated
from sales in the continent.
Last week Google was called to testify to a UK parliamentary
committee about a 130 million pounds ($186 million) back tax
bill, agreed with the British tax authority in January, that the
Opposition Labour party described as "derisory".
The deal brought Google’s total British tax bill for 2005 to
2015 to around 200 million pounds, whereas its UK revenue
amounted to 24 billion pounds.
Google Netherlands Holdings NV, which has no employees, had a
Dutch tax bill of just 2.8 million euros, its accounts showed.
(Reporting by Toby Sterling in Amsterdam and Tom Bergin in
London; Editing by David Holmes)
[© 2016 Thomson Reuters. All rights
reserved.] Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |
|
