IT Pro is supported by its audience. When you purchase through links on our site, we may earn an affiliate commission. Learn more

Google settles tax payment in Ireland

Company makes settlement for back tax and interest payments

Google has reportedly agreed to pay €345.2 million ($387.1m) in back taxes and interest to the Irish government. 

The payment, discovered by the Irish Times in Google Ireland's accounts filings, included €218 million in back taxes to the Irish government and €127.2 million in interest. The payments are a tax settlement between Google and the Irish government that forms part of a total 2020 corporate tax bill of €622 million. 

Google Ireland made €48.4 billion in revenues during 2020, representing a year-on-year increase of €2.7 billion from €45.7 billion. It also made €2.85 billion in pre-tax profits that year, up 46% from €1.94 billion during the prior year. 

In April, the paper reported that Google had used an accounting technique called the 'double Irish' to siphon money from its Irish operation. Google's Irish operation licensed intellectual property from its tax-registered entity in Bermuda, paying royalties in return. This allowed the company to use Bermuda (which has a zero percent tax rate) as a tax haven. The Irish government viewed the company as tax-resident in Bermuda, while the US considers it to be tax-resident in Ireland. 

That arrangement, abolished in 2015, was finally phased out for existing users in 2020. Google restructured its tax operation that year, moving its intellectual property holdings back to the US. 

In October, Ireland said it would join an international agreement that would set a minimum 15% tax rate on multinational companies, up from its previous 12.5%. It's part of an OECD initiative that calls for companies to pay taxes in countries where their products and services are sold. 

Last year, an EU court ruled that Apple didn't have to pay €13 billion in back taxes after a long legal battle. 

Big tech companies have come under fire in the past for using tax loopholes around the world that enable them to escape payments.

Featured Resources

Four strategies for building a hybrid workplace that works

All indications are that the future of work is hybrid, if it's not here already

Free webinar

The digital marketer’s guide to contextual insights and trends

How to use contextual intelligence to uncover new insights and inform strategies

Free Download

Ransomware and Microsoft 365 for business

What you need to know about reducing ransomware risk

Free Download

Building a modern strategy for analytics and machine learning success

Turning into business value

Free Download

Recommended

Tax the tech giants, not the consumer
public sector

Tax the tech giants, not the consumer

1 Jul 2021

Most Popular

Russian hackers declare war on 10 countries after failed Eurovision DDoS attack
hacking

Russian hackers declare war on 10 countries after failed Eurovision DDoS attack

16 May 2022
Windows Server admins say latest Patch Tuesday broke authentication policies
Server & storage

Windows Server admins say latest Patch Tuesday broke authentication policies

12 May 2022
Microsoft to double salary budget to retain workers
Careers & training

Microsoft to double salary budget to retain workers

17 May 2022