Google shifted $9.8 billion in revenue to Bermuda in order to avoid paying $2 billion in global taxes, Bloomberg reported. The search giant reportedly used common revenue funnelling techniques to avoid its tax obligations.
News of the tax dodging comes as governments from around the world begin decrying corporate tax avoidance.
"When corporations skip out on their taxes, the rest of us are left to pick up their tab," said tax and budget advocate for the U.S. Public Interest Research Group (PIRG) Dan Smith in a statement on corporate tax dodging. "Right now, this kind of tax dodging is perfectly legal, but it's not fair and it's time to put an end to it."
Google used tax avoidance techniques known as the "Double Irish" and the "Dutch Sandwich" to avoid its tax bills. The techniques involve sending profits through an Irish subsidiary to a Dutch firm which sends the revenue to another Irish firm headquartered in a tax haven like Bermuda.
The legal techniques are used to reduce corporate tax burden through a number of corporate loopholes found in both Ireland and the Netherlands.
Google used the tax avoidance techniques to cut its overall tax bill in half, Bloomberg reported. While tax avoidance is a common practice for corporations, Google has continued to be a prime target for tax dodging complaints.
Corporate taxation has been a big issue for politicians this year. In September, the U.S. Senate grilled HP and Microsoft on allegations of tax avoidance. Google and Amazon were also recently called out for not paying enough tax by members of the UK Parliament.
Google declined to comment on the reports.
This article was originally published on V3.
Twitter Canada MD Kirstine Stewart to Keynote Toronto
ClickZ Live Toronto (May 14-16) is a new event addressing the rapidly changing landscape that digital marketers face. The agenda focuses on customer engagement and attaining maximum ROI through online marketing efforts across paid, owned & earned media. Register now and save!