Google paid €164m tax on €19.4bn profit
GOOGLE paid just €164m in tax last year despite a gross profit of €19.4bn being declared.
The tech giant posted a surge in the revenues and profits that it reports in Ireland.
The firm said that turnover increased to €26.3bn in 2016, a €3.7bn rise on 2015, with a gross profit of €19.4bn.
However, because of legal tax avoidance rules, it paid tax of only €164m.
The accounts show that €18.4bn was deducted from its gross profit figure for “administrative expenses”.
With other considerations, its taxable profit in Ireland for the year was €1.18bn, from which the tax bill of €164m accrued.
The news comes just one day after it emerged that Facebook paid just €30m in tax in Ireland on revenue of €12.6bn last year.
The company filed accounts here showing that its profit before tax in Ireland had risen from €109.6m to €174.3m, a 59pc increase.
Facebook has seen significant increases in the number of people using its services and now has 2.1 billion global users.
Instagram, which it also owns, has 800 million global users, while its WhatsApp messaging app has 1.2 billion global users.
While Google paid €164m in tax last year, it is more than three times Google’s Irish tax payment for 2015.
Tech giants like Facebook, Google and also Apple are regularly criticised for minimising their tax payments.
However, they legally organise revenue reporting in a way to minimise international tax bills.
As the results emerged yesterday, Google’s head of Irish operations Fionnuala Meehan said it now employed more than 7,000 people at its Dublin office, a jump of 9pc on last year. Other sections of its accounts show that it pays staff an average of €91,000 before pension contributions or share option payments.
Google has been buying up extra office space in the docklands region of Dublin city to keep pace with its growth.
Its most recent property move was the acquisition of a lease on the large Velasco building on Dublin’s Grand Canal, providing an additional 51,000sqft for its operations in Dublin. “We continue to expand our engineering operations in Dublin, adding 35 new roles last year,” said Ms Meehan.
“We now have over 400 engineers employed in Dublin. The Emea (Europe, Middle East and Asia) sales organisation here in Dublin is driving that growth across Europe and we continue to deliver value for our advertisers, publishers and partner networks.”
Google opened its second data centre in Dublin in 2016, representing an investment of €150m. In recent weeks, however, it has bought a plot of land in Denmark with a view to building a new data centre there.
Despite the rise in Google’s declared profits and tax here, the figures will be a reminder of the disparity between multinational firms’ revenue and tax that international accounting practices now reveal.
The European Commission may soon propose new rules around tax consolidation across the EU following support for such a measure from French President Emmanuel Macron.