Google pays £183m in back taxes to Irish government | google

Google’s Irish subsidiary has agreed to pay €218 million (£183 million) in back taxes to the Irish government, according to company files.

The US tech company, accused of evading hundreds of millions in taxes, Europe known as the “double Irish, Dutch sandwich”, said it “agreed to resolve certain tax issues relating to previous years”.

google Ireland said it would pay a corporate tax of $622 million for 2020, including the $218 million retroactive settlement and interest charges. The previous year, Google paid Ireland taxes of €263 million.

In accordance with a 2015 law, the company, which is part of parent company Alphabet, has promised last year that it would abolish the loophole strategy, allowing it to effectively shift offshore revenues across Europe to places like Bermuda, where the tax rate was zero. A Bloomberg Study showed that the scheme allowed Google to lower its foreign tax rate to just 2.4%.

Google has not explained the reason for the tax arrears in its accounts and has not responded to the request for comment. The filing stated only: “After the year-end, the company agreed to resolve certain tax issues related to previous years. This tax liability and associated interest are accounted for in the current financial year.”

Paul Monaghan, the chief executive of the Fair Tax Foundation, said: “There is a really disgraceful lack of transparency around Alphabet’s tax behavior, especially at the level of its Irish subsidiaries. Stakeholders have a right to know what this Irish corporate tax scheme is about has.

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Investors in particular should be concerned, as Alphabet’s US filings show that billions more are in dispute with tax authorities around the world in circumstances where, by its own definition, it has less than a 50% chance of to win.”

Ireland, which has provided low-tax European headquarters for many of the world’s largest multinationals, initially refused to participate in a Organization for Economic Cooperation and Development Agreement for a worldwide minimum corporate tax rate of 15% in 2023, but dropped his resistance to the plan after a text change.

The agreement, to which most of the 140 countries participating in the negotiations have joined, aims to end decades of countries undercutting their neighbors by offering companies lower taxes.

The accounts show that Google Ireland Limited posted pre-tax profits of €2.85 billion in 2020, from €1.94 billion in 2019. Revenue increased by €2.7 billion to €48.4 billion.

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