Google diverts EUR 16 bln through Dutch tax loophole in 2016

Google increased in 2016 the amount of income diverted via the Netherlands to the tax haven of Bermuda, according to Dutch regulatory filings reported by the newspaper Het Financieele Dagblad. The company sent almost EUR 16 billion via the 'Dutch sandwich', or EUR 1 billion more than the previous year. 

Google Netherlands Holdings reported the figures to the Chamber of Commerce's business register. The company was set up in 2004 to handle royalties paid by other subsidiaries to use the Google name and technology. The rights to the latter are held by Google Ireland Holdings, a company based in Ireland but managed from Bermuda. Its tax liability falls in Bermuda, a country with no corporate tax. 

Most of the royalties received by the Dutch holding company are from another Irish company, Google Ireland Limited, which collects ad receipts for Google outside the US. Another EUR 3.7 billion collected by the Dutch company is from a Google subsidiary in Singapore, Google Asia Pacific.

Google has defended its tax record in the past, saying it pays all the taxes due and complies with local legislation where it operates. The Irish government closed in 2015 the so-called 'Double Irish' loophole used by companies like Google, but existing arrangement are allowed to continue until the end of 2020.