It's a game that all multi-national corporations play in one fashion or another – the game of evading as much tax as you can; and Google is the latest corporation to be outed as a global tax dodger.
Last month the team at Ars Technica first reported about Google and its use of the "Double Irish" and the "Dutch Sandwich" techniques in order to move incredible sums of money – legally – from countries where they would have to pay taxes to countries where they didn't have to pay any, or at least a vastly smaller amount. It is the "in" method for companies to avoid paying double-digit tax rates in most of the countries where they do business.
Now today we have a report out of Bloomberg where they have found out that a Google subsidary in the Netherlands managed to avoid paying $2 billion on worldwide taxes by moving almost $10 billion to a shell company in Bermuda.
To be clear here – as questionable and shady as these kinds of transfers might be they are totally legal – but the techniques being used are starting to get the attention of the governments of the countries where companies like Google are moving money from, to the point that one British MP called Google's use of these types of tax avoidance practices as being "immoral".
The Bloomberg investigation isn't alone either as Ireland's Sunday Independent newspaper has been conducting their own and found that Google has been doing everything it can to avoid paying a fair tax rate as the company was found to have "paid a puny 0.14 per cent tax on sales of over €47 billion ($61.5 billion) in seven years"
“While people reel in the aftermath of another austerity budget, entirely legal accounting magic allowed the multibillion-earning multinational to pay fractional tax to the Irish Exchequer,” the newspaper reported Sunday.
“On turnover of €47.44 billion ($62.1 billion), Google Ireland paid total tax of €69.91 million ($91.5 million) between 2005 and 2011. And in spite of its massive earnings, profit before tax during that period is an astonishingly small €114 million ($149.3 million).”
Google Ireland is quick to point out though that the company makes a substantial contribution to the Irish economy through their employing 2,500 in the European HQ in Dublin as well as their investments in the recently open data center and the purchase of three office building in Dublin in the year 2011 alone; but the company also has an obligation to their shareholders and that they comply with all the tax rules in Ireland.