Google moved EUR 19.9 billion ($22.7 billion) through a Dutch shell Firm to Bermuda in 2017, Within an arrangement that allows it to reduce its foreign tax bill, Based on documents filed at the Dutch Chamber of Commerce.
The sum channelled through Google Netherlands Holdings BV was approximately EUR 4 billion more than in 2016, the documents, registered on December 21, showed.
“We cover all of the taxes due and comply with the tax legislation in each country we operate in all over the world,” Google stated in an announcement.
“Google, as with other multinational firms, pays the vast majority of its corporate income taxation in its home nation, and we have paid a worldwide effective tax rate of 26% during the previous ten decades.”
For more than a decade that the agreement has allowed Google proprietor Alphabet to enjoy an effective tax rate in the single digits on its own non-US profits, approximately a quarter the normal tax rate in its overseas markets.
The subsidiary in the Netherlands is employed to shift revenue from royalties earned outside the United States to Google Ireland Holdings, an affiliate established in Bermuda, where companies pay no income tax.
The taxation plan, known as the”Double Irish, Dutch Sandwich”, is lawful and enables Google to avoid triggering U.S. income taxation or European withholding taxes to the funds, which represent the bulk of its overseas profits.
But under pressure from the European Union and the USA, Ireland in 2014 chose to phase out the arrangement, finishing Google’s tax benefits in 2020.