Google Convenient Tax Policy . . .

How much money did you spend on AdWords last year?

Are you interested where your money went?

If you are from Europe you will likely be surprised.

All the Google offices outside the USA send their money to Ireland

Why do they do that?

Because of the income taxes rates:

So 90% of Google revenue generated outside the USA comes to Google Ireland Limited

but Google Ireland Limited doesn't pay tax from this amount

It funnels funds to another Google company Google Ireland Holdings by paying for a technology licence

So Google Ireland Limited (the first company) is boosting its costs by paying for the technology to its sister company

But sometimes higher cost is good

Revenue - Cost = Income

We don't want Google income tax to be high, right?

The second company, Google Ireland Holdings, the owner of the technology also operates in Ireland

Will it pay taxes?

Well, no!

It is only formally set up in Ireland, this company is a tax resident in Bermudas

But Ireland tax law forbides tax deductions from licence costs when the second company is outside the European Union

Fortunately tax law is different in Holland and allows dedutions without restrictions

Google has another branch in Holland

Now Google Ireland Limited can deduct its technology costs and send the money to Holland

Google Netherlands B.V. will just send it back to Ireland to Google Ireland Holdings

This is why we call it
‘Double Irish with a Dutch Sandwich’

Google in Ireland gets all the revenue from Europe

Google Ireland pays to Google Netherlands for technology

Google Netherlands pass 98.9% of this money to the second Ireland company

The second Ireland company is registered as a tax resident in Bermudes.

Tax rate in Bermudas

O%

0%? 30%?

AND YOU

what are you doing to optimize your taxes?