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Google slashes tax bill through ‘Double Irish’ technique

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Google drastically cut it’s tax bill by $3.1 billion (€2.2billion) in the last three years by employing a strategy called “Double Irish” where it sent foreign profits through it's Irish operation to Bermuda.

Their system of “income shifting” means the company reduced its overseas tax rate to 2.4 percent, which is the lowest of the top five US technology companies according to regulatory fillings in six countries.

The strategy employed by Google yesterday attracted criticism in the US where the corporate tax rate is 35 percent. The “Double Irish” tax arrangement got its name from its reliance on two Irish companies.

Facebook Ireland has been prompted to use a similar structure which will allow them to send earnings from Ireland to the Cayman Islands.

Google's process of international income shifting helped cut their overall tax rate to 22.2 percent last year. In the past the Internet giant has also shuttled income through the Netherlands in a similar technique known as the “Dutch Sandwich”.

“It’s remarkable that Google’s effective rate is that low,” Martin A. Sullivan. A tax economist told Bloomberg.

Sullivan who previously worked for the U.S. Treasury Department added: “We know this company operates throughout the world mostly in high-tax countries where the average corporate rate is well over 20 per cent.”

Speaking about their tax techniques a Google spokesperson said that the firms practices were “very similar to those at countless other global companies operating across a wide range of industries”.

Google employs almost 2,00 people in Ireland and in August announced the creation of 200 additional jobs at it's headquarters in Dublin. Last year they paid in Ireland alone they paid taxes of €18.3 million which was up almost €10 million from 2008.

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