Alphabet Inc. subsidiary, Google has apparently been using a Bermudan shell company to shield its profits from across the world from taxation. This news has come from Netherlands" regulatory filings for 2016.
The search giant has increased the amount of money it moved by about seven percent over 2015. The movement of profits goes something like this: the company shifts revenue from an Irish subsidiary into an employee-less Dutch firm. Then, the Silicon Valley corporation transfers the amount to a Bermudan mailbox, which is owned by yet another company registered in Ireland.
This process is commonly called "a Double Irish and a Dutch Sandwich". The revelation came through the official filings that the company made with Netherland"s Chamber of Commerce, which was released online on Tuesday.
In its defense, a spokesperson for Google claimed:
"We pay all of the taxes due and comply with the tax laws in every country we operate in around the world. We remain committed to helping grow the online ecosystem."
The Irish government, for its part, has made amendments to their laws that will make it much more difficult for companies to exploit the "Double Irish" loophole. However, the companies already employing the structure may continue doing so until 2020. In November, The Paradise Papers revealed that Apple was utilizing similar practices to avoid paying taxes.
Over the course of 2016, Google was able to amass $60.7 billion free of any taxation, according to its SEC filings.
Source: Bloomberg