According to company filings on Thursday, Google's Irish subsidiary has agreed to pay €218 m 183 m in back taxes to the Irish government.
Dutch Sandwich, the US tech giant accused of avoiding hundreds of millions of dollars in tax in Europe through loopholes known as Double Irish, said it agreed to the resolution of certain tax matters relating to prior years. Google Ireland Ltd said it would pay €622 m in 2020, including the €218 m backdated tax settlement and interest charges. The company, which is part of Alphabet, promised last year that it would ditch the Double Irish, Dutch sandwich strategy, which allowed it to shuffle revenues made in Europe offshore to places like Bermuda, where the tax rate was zero. The scheme allowed Google to reduce its overseas tax rate to just 2.4%, according to a Bloomberg investigation.
Google did not respond to requests for comment, and did not explain the reason for the back tax payment in its accounts. The filing said only: Subsequent to year-end, the company agreed to the resolution of certain tax matters relating to prior years. The tax liability and associated interest are recognized in the current financial year. Paul Monaghan, the chief executive and Fair Tax Foundation, said there was a disgraceful lack of transparency around Alphabet's tax conduct, especially at the level of Irish subsidiaries. Stakeholders have a right to know what the Irish corporation tax settlement relates to.
It has less than 50% chance of winning, according to Alphabet's US filings showing that it has more than 50% of the dispute with tax authorities around the globe. The agreement, which has been joined by 136 out of 140 countries, is designed to end decades of countries undercutting their neighbours by offering lower taxes.