Google managed to withdraw from taxation $ 22.7 billion through Ireland and Bermuda

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Reuters journalists found out that the use of a tax optimization scheme called “double Irish with a Dutch sandwich” allowed Google in 2017 to deduct almost $ 23 billion from taxation.
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How it works

To implement the optimization scheme, subsidiaries are used in Ireland, the Netherlands and Bermuda. The money passes from the Irish company through the Dutch (“Dutch sandwich”) to Bermuda, and then the funds are again returned to Ireland to the account of another “daughter” (“double Irish”).

Reuters journalists got access to documents of the Netherlands Chamber of Commerce, according to which, in this way, Google managed to withdraw $ 22.7 billion from taxation in the US and Europe.

Similarly, Google manages to evade paying both the American corporate income tax — Bermuda does not have it — nor the European tax on the repatriation of income. Interestingly, in 2017, the Dutch “daughter” of Google paid taxes of € 3.4 million.

Schematic perspectives

According to media reports, in 2016 Google, with the help of a tax scheme, managed to divert about € 16 billion from taxation.

“Like any other multinational company, Google pays the vast majority of its corporate income tax at home, and the global effective tax rate over the past 10 years has been 26%. We pay all taxes and comply with tax laws in each country in which we operate around the world, ”commented on Google using tax optimization schemes.

Despite the effectiveness of the scheme described, its future may be at stake. The EU and US authorities do not like the fact that large companies underpay taxes because of existing loopholes in the legislation. This is why, in 2014, under pressure from the European Union and the United States, Ireland decided to stop providing Google with tax advantages starting from 2020.

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