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{"source_url": "https://www.theguardian.com", "url": "https://www.theguardian.com/technology/2020/jan/01/google-says-it-will-no-longer-use-double-irish-dutch-sandwich-tax-loophole", "title": "Google says it will no longer use 'Double Irish, Dutch sandwich' tax loophole", "top_image": "https://i.guim.co.uk/img/media/6d2d25af6617ff47691050536e990f48e4c3afb7/0_117_3500_2101/master/3500.jpg?width=1200&height=630&quality=85&auto=format&fit=crop&overlay-align=bottom%2Cleft&overlay-width=100p&overlay-base64=L2ltZy9zdGF0aWMvb3ZlcmxheXMvdGctZGVmYXVsdC5wbmc&enable=upscale&s=9d55c3037cc96b0b8374d4a4aa4c7e90", "meta_img": "https://i.guim.co.uk/img/media/6d2d25af6617ff47691050536e990f48e4c3afb7/0_117_3500_2101/master/3500.jpg?width=1200&height=630&quality=85&auto=format&fit=crop&overlay-align=bottom%2Cleft&overlay-width=100p&overlay-base64=L2ltZy9zdGF0aWMvb3ZlcmxheXMvdGctZGVmYXVsdC5wbmc&enable=upscale&s=9d55c3037cc96b0b8374d4a4aa4c7e90", "images": ["https://phar.gu-web.net/count/pvg.gif", "https://phar.gu-web.net/count/pv.gif", "https://i.guim.co.uk/img/media/6d2d25af6617ff47691050536e990f48e4c3afb7/0_117_3500_2101/master/3500.jpg?width=1200&height=630&quality=85&auto=format&fit=crop&overlay-align=bottom%2Cleft&overlay-width=100p&overlay-base64=L2ltZy9zdGF0aWMvb3ZlcmxheXMvdGctZGVmYXVsdC5wbmc&enable=upscale&s=9d55c3037cc96b0b8374d4a4aa4c7e90", "https://sb.scorecardresearch.com/p?c1=2&c2=6035250&cv=2.0&cj=1&comscorekw=Alphabet%2CGoogle%2CUS+taxation%2CUS+news%2CTechnology", "https://i.guim.co.uk/img/media/6d2d25af6617ff47691050536e990f48e4c3afb7/0_117_3500_2101/master/3500.jpg?width=300&quality=85&auto=format&fit=max&s=410ad2488888d6533da1cb31d783a6ef"], "movies": [], "text": "Technique allowed the tech giant to delay paying US taxes on international earnings for years, and pay a lower tax rate overseas\n\nGoogle says it will no longer use 'Double Irish, Dutch sandwich' tax loophole\n\nInternational tax authorities were welcoming in the New Year after Google\u2019s parent company, Alphabet, announced it will no longer use a notorious tax loophole known as the \u201cDouble Irish, Dutch sandwich\u201d.\n\nThe technique allowed the tech giant to delay paying US taxes on international earnings for years, and pay a lower tax rate overseas. It is thought to have allowed American companies to cut their tax bills by hundreds of billions of dollars, but is finally being closed by authorities.\n\nA Google spokesman confirmed the company would scrap the intellectual property licensing structure, by which international profits are channelled through Ireland and on to Caribbean tax havens, putting them outside the reach of US tax authorities.\n\nThis will simplify Google\u2019s tax arrangements in line with efforts by the Organisation for Economic Co-operation and Development to limit international tax avoidance, following changes to US and Irish tax law.\n\nIt is estimated that by the end of 2017, some of America\u2019s most profitable companies, including Apple, the largest by market capitalisation, had sequestered more than $1tn offshore, using the \u201cdouble Irish\u201d to park billions in \u201cghost companies\u201d. Companies including Google, Cisco, Pfizer, Merck, Coca-Cola and Facebook all avoided a 35% US corporate tax rate, which has now been cut by Donald Trump.\n\nLike other multinationals that make use of tax minimization schemes, Google has always said it pays all its taxes.\n\nAppearing before a US Senate subcommittee in 2013, Apple chief executive Tim Cook claimed the company paid \u201call the taxes we owe, every single dollar\u201d.\n\n\u201cWe don\u2019t depend on tax gimmicks,\u201d he added. \u201cWe don\u2019t stash money on some Caribbean island.\u201d\n\nBut five months later, under pressure from the European Union and the Trump administration, Irish officials began to crack down on the loop hole. In 2017, US authorities gave companies until the end of 2020 to end the system.\n\nGoogle now appears to have acted. In a statement, it said it was reacting to changes in US tax law designed to limit the ability of companies to cut their US tax bills.\n\nFor more than a decade, Dutch, Irish and US tax law allowed Google to enjoy an effective tax rate in the single digits on non-US profits, estimated at around a quarter the average tax rate in overseas markets.\n\nFilings seen by Reuters showed that in 2018 Google moved \u20ac21.8bn ($24.5bn) through its Dutch holding company to Bermuda, up from \u20ac19.9bn in 2017.\n\n\u201cA date of termination of the company\u2019s licensing activities has not yet been confirmed by senior leadership, however management expects that this termination will take place as of 31 December 2019 or during 2020,\u201d the filing with the Dutch Chamber of Commerce said.\n\n\u201cConsequently, the company\u2019s turnover and associated expense base generated from licensing activities will discontinue as of this date.\u201d\n\nUnder the Double Irish, companies shift taxable income from an operating company in Ireland to another Irish-registered firm in an offshore tax haven. Dutch tax law allows untaxed profits to be moved to a tax haven without incurring a withholding tax, so a Netherlands-based company is used in the middle of this \u201csandwich\u201d.\n\nThe Dutch Google subsidiary was used to shift revenue from royalties earned outside the US to Google Ireland Holdings, an affiliate based in Bermuda, where companies pay no income tax. This allowed Google to legally avoid triggering US income taxes or European withholding taxes on the bulk of its overseas profits.\n\n\u201cIncluding all annual and one-time income taxes over the past 10 years, our global effective tax rate has been over 23%, with more than 80% of that tax due in the US,\u201d the company stated in the Dutch filing.\n\nAfter Donald Trump\u2019s tax reforms dropping the tax rate to 15.5% from 35% came into effect in early 2018, Apple announced plans to repatriate $252bn in cash over five years.\n\nBut despite the end of the \u201cDouble Irish\u201d and \u201cDutch Sandwich\u201d, tax experts warn that little is known about how specific companies have adjusted their tax arrangements.\n\n\u201cBased on what we have been able to see in the past, there is no reason to think that planning [by multinationals] hasn\u2019t already evolved several generations beyond the kind of classic \u2018Double Irish\u2019 that is now officially coming to an end,\u201d Chris Sanchirico, a law professor at the University of Pennsylvania, told the Financial Times.\n\nIn 2017 the Guardian and other outlets reported on the Paradise Papers, a huge trove of confidential documents regarding offshore investments. The reports revealed that Apple, for example, had found a new tax structure to exploit, routing international profits through Jersey.\n\n\u201cUS multinational firms are the global grandmasters of tax avoidance schemes that deplete not just US tax collection but the tax collection of almost every large economy in the world,\u201d Ed Kleinbard, a former corporate lawyer and now a professor of tax law at the University of Southern California, said at the time.", "keywords": [], "meta_keywords": ["Alphabet", "Google", "US taxation", "US news", "Technology"], "tags": [], "authors": ["Edward Helmore"], "publish_date": "Wed Jan 1 00:00:00 2020", "summary": "", "article_html": "", "meta_description": "Technique allowed the tech giant to delay paying US taxes on international earnings for years, and pay a lower tax rate overseas", "meta_lang": "en", "meta_favicon": "https://assets.guim.co.uk/images/favicons/fee5e2d638d1c35f6d501fa397e53329/152x152.png", "meta_data": {"description": "Technique allowed the tech giant to delay paying US taxes on international earnings for years, and pay a lower tax rate overseas", "format-detection": "telephone=no", "HandheldFriendly": "True", "viewport": "width=device-width,minimum-scale=1,initial-scale=1", "apple-mobile-web-app-title": "Guardian", "application-name": "The Guardian", "msapplication-TileColor": "#052962", "theme-color": "#052962", "msapplication-TileImage": "https://assets.guim.co.uk/images/favicons/023dafadbf5ef53e0865e4baaaa32b3b/windows_tile_144_b.png", "author": "Edward Helmore", "thumbnail": "https://i.guim.co.uk/img/media/6d2d25af6617ff47691050536e990f48e4c3afb7/0_117_3500_2101/master/3500.jpg?width=620&quality=85&auto=format&fit=max&s=2150ae84124317ef4d7f24b46d3cbd4c", "keywords": "Alphabet,Google,US taxation,US news,Technology", "news_keywords": "Alphabet,Google,US taxation,US news,Technology", "og": {"url": "http://www.theguardian.com/technology/2020/jan/01/google-says-it-will-no-longer-use-double-irish-dutch-sandwich-tax-loophole", "image": "https://i.guim.co.uk/img/media/6d2d25af6617ff47691050536e990f48e4c3afb7/0_117_3500_2101/master/3500.jpg?width=1200&height=630&quality=85&auto=format&fit=crop&overlay-align=bottom%2Cleft&overlay-width=100p&overlay-base64=L2ltZy9zdGF0aWMvb3ZlcmxheXMvdGctZGVmYXVsdC5wbmc&enable=upscale&s=9d55c3037cc96b0b8374d4a4aa4c7e90", "description": "Technique allowed the tech giant to delay paying US taxes on international earnings for years, and pay a lower tax rate overseas", "type": "article", "title": "Google says it will no longer use 'Double Irish, Dutch sandwich' tax loophole", "site_name": "the Guardian"}, "article": {"author": "https://www.theguardian.com/profile/edwardhelmore", "publisher": "https://www.facebook.com/theguardian", "section": "Technology", "published_time": "2020-01-01T15:49:29.000Z", "tag": "Alphabet,Google,US taxation,US news,Technology", "modified_time": "2020-01-01T15:49:29.000Z"}, "al": {"ios": {"url": "gnmguardian://technology/2020/jan/01/google-says-it-will-no-longer-use-double-irish-dutch-sandwich-tax-loophole?contenttype=Article&source=applinks", "app_store_id": 409128287, "app_name": "The Guardian"}}, "fb": {"app_id": 180444840287, "pages": 516977308337360}, "twitter": {"app": {"id": {"iphone": 409128287, "ipad": 409128287, "googleplay": "com.guardian"}, "name": {"googleplay": "The Guardian", "ipad": "The Guardian", "iphone": "The Guardian"}, "url": {"ipad": "gnmguardian://technology/2020/jan/01/google-says-it-will-no-longer-use-double-irish-dutch-sandwich-tax-loophole?contenttype=Article&source=twitter", "googleplay": "guardian://www.theguardian.com/technology/2020/jan/01/google-says-it-will-no-longer-use-double-irish-dutch-sandwich-tax-loophole", "iphone": "gnmguardian://technology/2020/jan/01/google-says-it-will-no-longer-use-double-irish-dutch-sandwich-tax-loophole?contenttype=Article&source=twitter"}}, "image": "https://i.guim.co.uk/img/media/6d2d25af6617ff47691050536e990f48e4c3afb7/0_117_3500_2101/master/3500.jpg?width=1200&height=630&quality=85&auto=format&fit=crop&overlay-align=bottom%2Cleft&overlay-width=100p&overlay-base64=L2ltZy9zdGF0aWMvb3ZlcmxheXMvdGctZGVmYXVsdC5wbmc&s=840d7f4c2711ca35cd63698d57e952f4", "site": "@guardian", "card": "summary_large_image", "dnt": "on"}}, "canonical_link": "https://www.theguardian.com/technology/2020/jan/01/google-says-it-will-no-longer-use-double-irish-dutch-sandwich-tax-loophole"} |
