Monday , August 2 2021

Google made $ 23 billion in Bermuda in "legal" tax avoidance scheme – RT Business News

The US technology giant Google moved $ 23 billion in the Bermuda tax bill in 2017, an increase of $ 4 billion in 2016, reveals newly discovered submissions. Google has used the hole in the EU tax system for years.

Google used a Dutch shell company, called Google Netherlands Holdings BV, to transfer billions of dollars to its subsidiary, Bermuda-based Google Ireland Holdings, for years, to avoid being subjected to much higher taxes in USA and Europe.

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The documents submitted by Google to the Dutch Chamber of Commerce on December 21 found that the company owning the alphabet had made $ 22.7 billion through its Dutch company and a notorious offshore. The same documents show that Google paid about $ 3.4m in taxes in the Netherlands that year.

The scheme, popular with many international conglomerates like Apple and Microsoft, is known as "Double Irish with a Dutch sandwich" and usually includes two Irish companies and one registered in the Netherlands.

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Using the low Irish corporate tax rate (just 12.5 percent compared to 21 percent in the United States), much of Google's profits are transferred to the Irish branch as copyright and then moved to a Dutch subsidiary. The funds then go to a second Irish company, a shell paying taxes to Bermuda, which has a zero corporate tax rate. The scheme allowed Google to cut billions of taxes abroad with billions because it has now shifted profits to land over the past decade.

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The logo of the French digital company Qwant is seen in their new headquarters in Paris. © Reuters / Benoit Tessier

The tax avoidance strategy of Google and other tech companies, albeit technically legal, has long attracted the attention of lawmakers from the United States and the EU, who ultimately pushed Ireland to lift the controversial arrangement as of 2015. However, the major technology companies involved in Google received a grace period by January 2020 to prepare for an unobstructed exit.

Google insists that its way of dealing with its finances is in line with the law and hence perfectly normal because it rejected criticism in a statement Thursday.

"We pay all taxes that we have to respect and respect the tax laws in every country we work worldwide" said, noting that the company has "paid a global effective tax rate of 26 percent over the last 10 years."

The company seems far from being apologetic for its widespread use of the scheme.

In 2012, Eric Schmidt, then CEO of Google, said it was "very proud" from the tax evasion mechanism of the company, arguing that the company simply used the stimulus provided by various governments.

"It's called capitalism, we are proud capitalist, I'm not confused about it" he said at that time.

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Countries like Britain and France, who do not have millions of dollars in taxes due to the hole, are challenging the Big Tech tax avoidance scheme.

The UK should introduce so-called "Google tax" in 2020. Chancellor Philip Hammond announced in October that the Digital Services Tax (DST) will levy a 2% tax revenue tax from UK users' activities from search engines, social media and online platforms.

France, while facing predictable opposition from Ireland and several other EU member states, imposes such a European tax of a similar nature. Before coming out on the ground, France introduced its own tax GAFA, called Google, Apple, Facebook and Amazon, in January, hoping to raise 500 million euros (572 million dollars) with fees.

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