Google moves billions over to tropical tax haven

Google has moved more than £14 billion ($26.8b) into a tax haven in a controversial bid to slash its bills.

The internet search giant funnelled the cash through low-tax European countries and then into Bermuda, in a switch thought to have saved it $5.1b in 2016.

It is the latest example of the firm using complex arrangements to shield itself from tax, according to the Daily Mail.

Liberal Democrat leader Sir Vince Cable said the move was “galling” and a campaign group said it showed international tax rules were deeply flawed.

The move was revealed yesterday after filings with regulators in the Netherlands were published.

To reduce its bills, Google books most of its international advertising revenues — including those from Britain — in lowtax Ireland. It then passes this on to a company in the Netherlands, where there are also generous tax laws, in a strategy known as “the Double Irish with Dutch Sandwich“.

From there the money is sent to Bermuda, where the corporate tax rate is zero.

The firm used the same technique in 2015, though the amount it had saved in 2016 — the most recent accounts available — was 7 per cent higher, reports Bloomberg.

Major tax reforms recently passed in the United States are also likely to mean Google can more easily repatriate its $86.3b overseas cash pile.

It will be allowed to do so by paying a one-off 15.5 per cent rate on the stash, under changes pushed for by President Donald Trump.

A Google spokesman insisted the company paid all the taxes that were due.

But the company is under growing pressure to pay more tax, with bureaucrats in Brussels currently drawing up plans to squeeze more cash out of it and its rivals.

Technology companies are also under fire on a range of other issues, including their efforts to tackle content featuring extremism and abuse on their platforms.

This week British Security Minister Ben Wallace said Google and its competitors needed to be more responsible or be prepared to face an onslaught of new taxes.

The tax loophole that allows companies to do the “Double Irish” was closed in 2015 but those using it still have until 2020 to change.

Cable said it was “another example of a big internet company showing total disregard for national tax authorities”.

A Google spokesman said : “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.”

US filings show Alphabet, Google’s parent company, paid an effective tax rate of 19 per cent — about $6.5b on profits of $27.4b. Its rivals Facebook and Apple have been accused of making similar tax moves to shave billions off their bills.

Apple is thought to have the biggest offshore cash pile, at about $355b.