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Bermuda: Google’s hidden tax haven

Owni retrieved Google Ireland's records, showing the company transfers its profits to an exotic tax haven in Bermuda. We detail the loopholes Google leveraged to avoid paying taxes.

by Stanislas Jourdan & Guillaume Dasquié On April 19, 2011

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Since last October, several investigations showed that Google created legal arrangements enabling it to avoid taxes – to the tune of one billion dollars per year. It involved several subsidiaries abroad, notably Ireland, all of which were founded by Google.

In Dublin, OWNI received the articles of association along with the documented minutes with the search engine shareholders. Two of them, Google Europe and Google Ireland Holdings, collected profits generated by the European Internet and then transferred the funds to an account located in a tax haven country – the island of Bermuda. As shown in the documents below, these structures depend on the group’s director being specifically assigned to operations of tax exemption in the direction of Bermuda.

In practical terms, when a French, English, or German user purchases services from Google (such as Adwords or Adsense) the credit card is debited to a bank account located in Dublin. Afterward a portion of the net profits generated by Google disappears in Bermuda via a holding company based in the Netherlands.

In Paris, we asked Google spokeswoman Anne-Gabrielle Dauba Pantanacce about the morality of these arrangements – which are more frequently found in the tobacco and weapons industries. But Anne-Gabrielle’s only affirmed:

I have no details to share with you on that.

The mere existence of Google Bermuda is a subject within itself. The documents mention that the main office is in the city of Hamilton at Clarendon House, located on the corner between Church Street and Par-la-Ville.

Church Street: the center of Hamilton

At this address, Google Bermuda only consists of a mailbox held by Conyers Dill & Pearman, a company which specializes in offshore arrangements. The firm is composed of several local business lawyers, working on behalf of multinational companies interested in this tax haven’s benefits.

It’s this firm that manages Google Bermuda Limited, replaced in 2006 by Google Bermuda Unlimited. This modification in status is far from trivial: In Irish law, the change allows Google to escape its obligation to make public its accounts. We spoke to Lorina Taylor, who works at Conyers Dill & Pearman as one of the consultants responsible for Google in Bermuda. After confirming the firm indeed managed Google’s accounts on the island, her superior cut short our interview:

We do not release information pertaining to our clients.

While Google employs roughly 1,800 people in Ireland, the Bermuda branch does not use any of these employees – even though it receives its income from European Internet users. Ironically, Google Bermuda doesn’t even exist on the Internet – the multi-billion dollar corporation hasn’t shelled-out the $89 for the domain name google.bm….

Photos flickr CC Loco Russo ; John Dawson
Translation: Stefanie Chernow

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