In 2020, Google will no longer take advantage of the so-called’double Irish’ and’Dutch sandwich’ loopholes. The company used the loopholes to save billions of dollars in taxes on overseas ad revenue.
The move comes as regulations aimed at changing how companies skirt taxes take effect in both the US and Ireland. Multinational organizations were able to use a network of affiliate organizations located in Ireland, the Netherlands, and Bermuda to collect and hold money made overseas.
Bermuda has no corporate income tax, making it a lucrative final stop to report income. The whole process effectively avoids paying us income tax and European withholding taxes on overseas profits.
Google moved $ 23 billion to Bermuda in 2017 using this tax avoidance strategy. Google continued to use the tax scheme to funnel money around the globe until the deadline Google is changing its tax structure now.
The tax cuts and jobs act of 2018 allowed companies to return money made overseas to the US without facing more US taxes. The changes could prove critical for Google, which is sitting on tens of billions in overseas earnings.