Alphabet, Google's parent company, has announced it will leave a tax gap known as "Double Irish, Dutch Sandwich." The technique allowed not only to delay the payment of taxes on the company's international earnings in the United States, but also to pay a lower tax rate abroad.
A Google spokeswoman confirmed that the company will no longer use the technique of channeling its international profits through Irish and Dutch subsidiaries to “tax havens” in the Caribbean, advances to Reuters. The news agency had access to documents proving that by 2018 Google will have used its Dutch subsidiary to channel 21.8 billion euros into an account in the Bermuda islands.
"We are simplifying our business structure and will now license our intellectual property from the United States," said a spokeswoman for Google. "Given all the annual taxes over the past 10 years, our overall tax rate is over 23%, with over 80% of that representing a debt on US territory," he added.
The decision comes after the antitrust scrutiny of government entities such as the European Commission to technological giants. In September last year, Apple was heard by European Commissioner Margrethe Vestage about the € 13 billion "record fine" due to overdue taxes. The apple company was fined in 2016 due to negotiations with Ireland on rates, allowing the apple company to pay less than other companies in the sector.
The case began in 2014, when Margrethe Vestager stated that the tax benefits granted to Apple by the Irish government were in clear violation of European Union law. The Commission noted that this “special relationship” enabled the smartphone maker to pay only 0.005% of its 2014 profit tax. According to the European investigation, two tax regulations issued by Dublin offered Apple special conditions that allowed it to enjoy a tax rate substantially lower than that laid down in European legislation.