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Google To End 'Double Irish, Dutch Sandwich' Tax Plan

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AMSTERDAM (Reuters) - Google moms and dad Alphabet GOOGL.O will no longer utilize a copyright licensing plan, called the "Double Irish, Dutch sandwich", which permitted it to postpone paying U.S. taxes, 2018 tax filings reveal.

A Google spokesperson on Tuesday validated it would ditch the licensing structure, stating this remained in line with worldwide guidelines and followed modifications to U.S. tax law in 2017.

Dutch filings, which were seen by Reuters, revealed that in 2018 Google moved 21.8 billion euros ($24.5 billion) through its Dutch holding business to Bermuda, up from 19.9 billion in 2017. Google stated it would end the practice after 2019.

If you're ready to find out more on kwaku cpa review our own web site. "A date of termination of the Business's licensing activities has actually not yet been con_rmed by senior management, nevertheless management anticipates that this termination will take location since 31 December 2019 or throughout 2020," the Dutch filing stated.

"As a result, the Business's turnover and associated cost base created from licensing activities will terminate since this date," the filing with the Dutch Chamber of Commerce included.

Google, like other multinationals that use global tax reduction techniques, has constantly stated it pays all its taxes.

"We're now streamlining our business structure and will accredit our IP (copyright) from the United States, not Bermuda," a spokesperson stated in a declaration.

"Consisting of all yearly and one-time earnings taxes over the previous 10 years, our international reliable tax rate has actually been over 23%, with more than 80% of that tax due in the United States."

For more than a years, Dutch, Irish and U.S. tax law permitted Google to take pleasure in a reliable tax rate in the single digits on its non-U.S. earnings, around a quarter the typical tax rate in its abroad markets.

The subsidiary in the Netherlands was utilized to move income from royalties made outside the United States to Google Ireland Holdings, an affiliate based in Bermuda, where business pay no earnings tax.

The tax technique was legal and permitted Google to prevent setting off U.S. earnings taxes or European withholding taxes on the funds, which represent the bulk of its abroad earnings.

Under pressure from the European Union and the United States, Ireland in 2014 chose to phase out the plan, ending Google's Irish tax benefits in 2020.

The Trump administration's Tax Cuts and Jobs Act, which entered impact in January 2018, ended the factor for U.S. business to hoard foreign revenues offshore. Now revenues that have actually been made and taxed abroad are exempt to taxation when gone back to the U.S.
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