Google settles tax payment in Ireland

Google building
(Image credit: Shutterstock)

Google has reportedly agreed to pay €345.2 million ($387.1m) in back taxes and interest to the Irish government.

The payment, discovered by the Irish Times in Google Ireland's accounts filings, included €218 million in back taxes to the Irish government and €127.2 million in interest. The payments are a tax settlement between Google and the Irish government that forms part of a total 2020 corporate tax bill of €622 million.

Google Ireland made €48.4 billion in revenues during 2020, representing a year-on-year increase of €2.7 billion from €45.7 billion. It also made €2.85 billion in pre-tax profits that year, up 46% from €1.94 billion during the prior year.

In April, the paper reported that Google had used an accounting technique called the 'double Irish' to siphon money from its Irish operation. Google's Irish operation licensed intellectual property from its tax-registered entity in Bermuda, paying royalties in return. This allowed the company to use Bermuda (which has a zero percent tax rate) as a tax haven. The Irish government viewed the company as tax-resident in Bermuda, while the US considers it to be tax-resident in Ireland.

That arrangement, abolished in 2015, was finally phased out for existing users in 2020. Google restructured its tax operation that year, moving its intellectual property holdings back to the US.

In October, Ireland said it would join an international agreement that would set a minimum 15% tax rate on multinational companies, up from its previous 12.5%. It's part of an OECD initiative that calls for companies to pay taxes in countries where their products and services are sold.

Last year, an EU court ruled that Apple didn't have to pay €13 billion in back taxes after a long legal battle.

Big tech companies have come under fire in the past for using tax loopholes around the world that enable them to escape payments.

Danny Bradbury

Danny Bradbury has been a print journalist specialising in technology since 1989 and a freelance writer since 1994. He has written for national publications on both sides of the Atlantic and has won awards for his investigative cybersecurity journalism work and his arts and culture writing. 

Danny writes about many different technology issues for audiences ranging from consumers through to software developers and CIOs. He also ghostwrites articles for many C-suite business executives in the technology sector and has worked as a presenter for multiple webinars and podcasts.