Google moved
10.7 billion euros ($12 billion) through the Netherlands to Bermuda in 2014, as
part of a structure which allows it to earn most of its foreign income tax
free.
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.
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