One of Google’s headquarters is based in Dublin, Ireland. According to The Irish Times, Google shifted more than $75.4 billion in profits out of Ireland using the controversial “double Irish” tax arrangement in 2019.
Financial Times provided information about the “double-Irish” in 2014. In short, it is a simple structure used by US technology and pharmaceutical companies to route profits to tax havens like Bermuda where they hold intellectual property.
The double Irish exploits the different definitions of corporate residency in Ireland and the US. Dublin taxes companies of they are controlled and managed in Ireland, while the US’ definition if tax residency is based on where a corporation is registered. Companies exploiting the double Irish put their intellectual property into an Irish-registered company that is controlled from a tax haven such as Bermuda.
The Financial Times continued: Ireland considers the company to be a tax-resident in Bermuda, while the US considers it to be a tax-resident in Ireland. The result is that when royalty payments are sent to the company, they go untaxed – unless or until the money is eventually sent home to the US parent company.
The Irish Times reported that the “double Irish” was abolished in 2015 for new companies establishing operations in Ireland. However, it allowed companies already using it until the end of 2020 to phase it out.
To me, it sounds like Google took advantage of its ability to continue using the “double Irish” structure to move profits out of Ireland and to also keep those profits safe from being taxed in the United States. It bothers me when huge corporations make efforts to avoid paying their fair share of taxes.
That said, it appears what Google was doing was considered legal until the end of 2020. It appears that Ireland abolished the “double Irish” tax arrangement. My hope this means that big corporations will actually have to pay their taxes, just like small businesses are required to.