Google’s Irish subsidiary has agreed to pay 218 million euros (US$244.94 million) in back taxes to the Irish government, company filings showed on Thursday.
The US tech giant, which had been accused of avoiding tax across Europe through loopholes known as the “Double Irish, Dutch Sandwich,” said it had “agreed to the resolution of certain tax matters relating to prior years.”
Google Ireland Ltd said it would pay corporation tax of 622 million euros for last year, including the 218 million euros of backdated tax settlement and interest charges.
The previous year, Google Ireland paid taxes of 263 million euros.
The company, which is part of parent company Alphabet, last year promised that it would ditch the “Double Irish, Dutch sandwich” strategy, which allowed it to effectively shuffle revenue made across Europe offshore to places such as Bermuda, where the tax rate was zero.
A Bloomberg investigation showed that the scheme allowed Google to cut its overseas tax rate to just 2.4 percent.
Google did not explain the reason for the back tax payment in its accounts and did not respond to request for comment.
In the filing it said only: “Subsequent to year-end, the company agreed to the resolution of certain tax matters relating to prior years. This tax liability and associated interest are recognized in the current financial year.”
“There really is a disgraceful lack of transparency around Alphabet’s tax conduct, especially at the level of the Irish subsidiaries,” said Paul Monaghan, chief executive of the British-based Fair Tax Foundation. “Stakeholders have a right to know what this Irish corporation tax settlement relates to.”
“Investors in particular should be concerned given Alphabet’s US filings show that it has billions more in dispute with tax authorities around the globe in circumstances where, by its own definition, it has less than 50 percent chance of winning,” Monaghan said.
Ireland, which provides low-tax European headquarters for many of the world’s largest multinationals, has declined to sign up to an Organisation for Economic Co-operation and Development agreement for a global minimum corporate tax rate of 15 percent by 2023.
The agreement, which has been joined by 136 out of 140 countries taking part in negotiations, is designed to end decades of countries offering companies lower tax rates.
The accounts show that Google Ireland last year made a pretax profit of 2.85 billion euros, up from 1.94 billion euros in 2019.
Turnover rose by 2.7 billion euros to 48.4 billion euros.
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