I’ve written at length about how corporations have unmoored themselves from national law in the world of labor relations and environmental degradation, while those of us fighting this are left constrained by national law. What I haven’t written about at all is the other side of this coin, at the top end where companies hop around the globe to avoid paying taxes.
Google shifted more than $75.4 billion (€63 billion) in profits out of the Republic using the controversial “double-Irish” tax arrangement in 2019, the last year in which it used the loophole.
The technology giant availed of the tax arrangement to move the money out of Google Ireland Holdings Unlimited Company via interim dividends and other payments. This company was incorporated in Ireland but tax domiciled in Bermuda at the time of the transfer.
The move allowed Google Ireland Holdings to escape corporation tax both in the Republic and in the United States where its ultimate parent, Alphabet, is headquartered. The holding company reported a $13 billion pretax profit for 2019, which was effectively tax-free, the accounts show.
A year earlier, Google Ireland Holdings paid out dividends of €23 billion, having recorded turnover of $25.7 billion.
Google has used the double Irish loophole to funnel billions in global profits through Ireland and on to Bermuda, effectively putting them beyond the reach of US tax authorities.
Companies exploiting the double Irish put their intellectual property into an Irish-registered company that is controlled from a tax haven such as Bermuda.
Double-Irish sounds like an interesting whiskey variant, but as a tax system, it’s a complete and total disaster that is stripping governments of monies across the globe. These companies, very much including Google, need to reined in using a variety of new international laws and regulations with real teeth behind them. I wish those of us on the left side of the aisle took these issues more seriously and made them central to our political aims.