Google can give you instructions for anything, including how to dodge taxes. Newly published accounts show that in 2014 the tech giant, which now goes by the name of its parent company, Alphabet, moved 10.7 billion euros ($12 billion) — the bulk of its overseas profits — to avoid paying income taxes. Reuters is reporting that the company’s Dutch affiliate, Google Netherlands Holdings BV, transferred almost all of its non-U.S. revenue to an Irish company called Google Ireland Holdings. That allows Google to exploit the differences between U.S. and Irish tax codes to move the funds to Bermuda, where companies aren’t required to pay income tax. This maneuver — called a “double Irish with a Dutch sandwich,” which surprisingly enough is neither a pub lunch nor a sex act — allows the company to avoid both U.S. income taxes and European withholding taxes.
Thanks to the reshuffle, Alphabet only paid a 6 percent tax rate on its non-U.S. profits last year, which is about a quarter of average overseas tax rates. A Google spokesperson told Reuters the company “follows the tax rules in all the countries where it operates.” Google Netherlands Holdings, which has no employees, paid a Dutch tax bill of just 2.8 million euros.
Google has been employing this tactic for years, prompting chair of the Public Accounts Committee Margaret Hodge to call the company “evil, devious, calculating, and unethical,” but Google was too busy counting its enormous piles of money to pay her tirade much attention.