Google used ‘double-Irish’ to shift $75.4bn in profits out of Ireland

Google shifted more than $75.4 billion (€63 billion) in profits out of the Republic using the controversial “double-Irish” tax arrangement in 2019, the last year in which it used the loophole.

The technology giant availed of the tax arrangement to move the money out of Google Ireland Holdings Unlimited Company via interim dividends and other payments. This company was incorporated in Ireland but tax domiciled in Bermuda at the time of the transfer.

The move allowed Google Ireland Holdings to escape corporation tax both in the Republic and in the United States where its ultimate parent, Alphabet, is headquartered. The holding company reported a $13 billion pretax profit for 2019, which was effectively tax-free, the accounts show.

A year earlier, Google Ireland Holdings paid out dividends of €23 billion, having recorded turnover of $25.7 billion.

Google has used the double Irish loophole to funnel billions in global profits through Ireland and on to Bermuda, effectively putting them beyond the reach of US tax authorities.

Companies exploiting the double Irish put their intellectual property into an Irish-registered company that is controlled from a tax haven such as Bermuda.

Ireland considers the company to be tax-resident in Bermuda, while the US considers it to be tax-resident here. The result is that when royalty payments are sent to the company, they go untaxed – unless or until the money is eventually sent home to the US parent.

The “double Irish” was abolished in 2015 for new companies establishing operations in the Republic. However, controversially, it allowed those already using it until the end of 2020 to phase it out.

Google overhauled its global tax structure and consolidated its intellectual property holdings back to the United States in early 2020, meaning 2019 was the final year in which it availed of the arrangement.

Up to late 2019, Google Ireland Holdings Unlimited Company was an intellectual property licensing company with turnover derived from the licensing of IP to subsidiaries. The accounts state it had no employees and that it was tax resident at the time in Bermuda, where the “standard rate tax is 0 per cent”.

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Source: Google used ‘double-Irish’ to shift $75.4bn in profits out of Ireland

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